The deregulation of phone service in New Jersey requested by Verizon and Embarq would result in increased rates and a decline in service, a state official said last Thursday.
Stefanie Brand, director of the New Jersey Division of Rate Counsel, provided written testimony to the Board of Public Utilities asking it to deny requests by the telecommunications companies that would brand their retail residential and business services as "competitive."
The BPU can deregulate a service if it finds that there is enough competition. Such a designation allows companies to set what they consider to be their own fair prices in the free market. But the rate counsel says that since Verizon and Embarq provide 83 percent of the phone service in New Jersey, residents won't see much benefit.
"People looking for basic landline services or Lifeline (emergency) services don't have any real choice but to go with Verizon or Embarq," Brand said. "There is no real competition, and the (BPU) should not abrogate its obligation to ensure affordable phone service for these consumers."
According to the BPU, Basic service rates for residential customers could increase from $8.95 per month to more than $30 per month, costing the estimated 1.3 million residential customers who buy only basic service more than $312 million. Single-line business rates could increase from $15 per month to more than $35 per month, costing 60,000 single-line business customers more than $19 million. About 500,000 Lifeline Assistance customers could see their rates increase to $30 per month from the current top rate of $2.50 per month.
Rich Young, a spokesman for Verizon, dismissed the rate counsel's numbers as "doomsday predictions." "The fact is competition in New Jersey is flourishing in 2008, and it's only poised to grow," Young said, adding that consumers can choose from dozens of traditional landline companies, wireless providers and Internet phone service providers, such as Vonage and Skype. Verizon has 4 million retail lines in New Jersey. Young said that number has decreased monthly, in part, due to competition.
Embarq, operator of United Telephone Company of New Jersey, has 116,000 residential lines in the state, but would have almost double that amount if not for competition, according to written testimony the company gave to the BPU in December.
Tom Allibone, a New Jersey director of the consumer-advocacy group Teletruth, said the deregulation of telecommunications companies in 1996 has only led to increases in phone fees for customers - and not the expected decreases resulting from new competition. "People are looking for cheaper services, more services and reduction of costs," Allibone said. "I have to agree whole-heartedly with the rate counsel on this matter." (info from Press of Atlantic City)