Verizon New Jersey Proposal Sparks Fear Of Rate Hikes, Service Disruption

By John Celock

Advocates are urging New Jersey regulators to stop a proposal to reclassify Verizon’s land line services, saying it could hurt senior citizens and lead to rate hikes.

A coalition of legislative, non profit and union advocates staged a press conference call Wednesday calling on the New Jersey Board of Public Utilities to reconsider proposed changes that could reclassify Verizon’s land line services in the Garden State as competitive. Earlier this month the BPU sent notice that the agency was considering a proposal to reclassify the services in the state including for residential land lines, installation and directory assistance. The changes would be accompanied by a five-year rate cap for consumers. Advocates say that the changes are a deregulation of Verizon services, a phrase that the telecommunications company is fighting back against.

“That would still result in a 36 percent rate increase for residential service for that 5 year period and deregulate service quality standards,” Evelyn Liebman, New Jersey AARP associate director said on the call.

The BPU action comes after over three years of discussion between the regulator and Verizon of the telecommunications company’s desire to reclassify the services in the state. Verizon has sought the reclassification saying that it would allow for them to be competitive with pricing in New Jersey. Among the services being looked at by BPU is basic residential local phone service, single line business service, non-recurring residential installation charges and directory assistance. BPU could vote to approve the agreement reached between the agency and Verizon later this month.

Verizon spokesman Lee Gierczynski stressed to The Celock Report that the issue is not one of deregulation but rather of a reclassification for purposes of a competitive marketplace.

“There is significant competition from cable providers and other providers and other technologies,” he said. “It has reached the point that it is time to modernize these service regulations that only impact Verizon and none of its competitors.”

Advocates on Wednesday’s call said that the changes could negatively impact senior citizens, saying they are most likely to be using a land line only instead of a land line and cell phone. They also noted that in the event of a storm like Hurricane Sandy, landline phones worked better than cell phones.

“Our main concern is the quality of service,” Piscataway Mayor Brian Wahler, the president of the New Jersey League of Municipalities, said on the call. “It might be the only way to communicate for some folks.”

The timing of the proposal from the BPU is of concern to those against the change. State Senate Environment and Energy Committee Chairman Bob Smith (D-Piscataway) said on the call that he believes that the BPU should have provided more time for public comment on the situation. The utility regulator released plans for the proposal last Thursday with an eight-day period for public comment. AARP petitioned the BPU on Tuesday for an extension of the public comment period and was planning a telephone town hall with members for Wednesday to push further interest in the subject in an attempt to place pressure on the telecommunications agency.

Smith said that he believes the issue is an example of Gov. Chris Christie’s (R) administration “doing things in the dark. He cited a recent settlement that the acting Attorney General John Hoffman entered into with Exxon for cleanup of oil spills as part of this.

Assemblyman Dan Benson (D-Hamilton Township) used the call to stress that landlines should continue to maintain a regulatory framework as a utility. He said that in addition to what he sees as service decline and lack of maintenance after Hurricane Sandy, the future of New Jersey’s economy could be at stake.

“When we look to the future of New Jersey if you are going to attract high quality next generation jobs to New Jersey, you have to have the infrastructure,” Benson said.

A representative from the New Jersey Farm Bureau used the call to stress that rural communities in southern New Jersey could lose out on the changes, noting the importance of landlines to the telecommunications outlook in the rural parts of the state.

Gierczynski stressed that the issue will not deregulate Verizon, saying that the BPU can step in at any time and reclassify Verizon’s services again. He said that with the rate cap, consumers will not see any rate hike as part of it, calling it a leveling of the playing field.

“What this really does is it will provide some rate caps for a five year period of about $1.20 a year. There will be no rate increases for lifeline customers,” he said. “They will continue to pay what they pay today even if the Board approves the proposed settlement. It takes an incremental step to leveling that playing field for all providers.”

Liebman used the call to say that the information presented her fellow advocates, along with Smith and Benson, said that the BPU should not be rushed into any decision and more time is needed to craft a solution.

“This all shows the need to slow this train down,” she said. “We don’t want this administration to turn its back on consumers.”