Attorney General's Office Opposes Verizon Rate Increase Without Full Study

OLYMPIA - The Washington Utilities and Transportation Commission (WUTC) on Thursday will consider whether telecommunications company Verizon will be allowed to raise residential and business rates by $28 million a year without first justifying the increase in formal rate setting hearings.

In papers filed with the commission last month, the Public Counsel Section of the Washington Attorney General's Office opposed the proposed rate hike, which was included in the settlement of a case involving Verizon and long-distance carriers AT&T and WorldCom.

The case involved a move by AT&T to reduce its "access charges" -- the amount of money it pays to Verizon to provide long-distance service to Verizon's customers. Verizon agreed to reduce the amount it charges AT&T and other long distance carriers, but said it needs its own rate hike to recoup that money.

The Attorney General's Office contends that general rate increases can only be approved in formal rate cases filed with the commission. Formal rate cases require advance customer notice, public hearings, the gathering of evidence and expert testimony and a full evaluation of the company's earnings before a rate increase is approved.

If the proposed rate increase is approved in its current form, residential customers would pay 15 percent - or $2 - more each month for basic service. Business customers would pay at least an additional 8 percent each month - a $2.50 increase. All customers would also pay more for other services, including feature packages and directory assistance.
"Consumers deserve full notice, open hearings, and a thorough review of this proposed rate increase," Gregoire said. "The proposed process is disturbing and a complete break from the open, public process people expect and deserve."

The Attorney General's Office questions whether Verizon, which provides local phone service to about 1 million customers statewide, can justify the increase.

The hearing is scheduled for 9:30 a.m. Thursday, April 3, at the WUTC's Olympia offices, 1300 S. Evergreen Park Drive S.W., Olympia.

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