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Maryland orders investigation into BA ISDN costs
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INFO-POLICY-NOTES - Subscriptions from listproc@essential.org
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ISDN PRICING IN MARYLAND
July 3, 1996
- New lower ISDN tariffs now in effect in MD
- MD PSC orders expedited investigations to Bell Atlantic
ISDN costs, and is expected to further lower rates.
James Love, Director, CPT
July 3, 1996
Today the MD Public Service Commission (PSC) overruled its
Bell Atlantic friendly staff, and ordered an expedited
investigation into Bell Atlantic's costs of providing ISDN
service. CPT and others asked the Maryland PSC for such an
investigation last fall, but the order for the investigation
didn't come until today, when the Commission met to consider
the Bell Atlantic (BA) new ISDN rate proposal.
The MD PSC staff was represented by Ann Dean (voice: 410-
333-6086), who tried to make the Bell Atlantic tariffs seem
as good as she could by comparing BA's highest in the
country flat rate offering of $249 per month to the cost of
nailed up lines (24 hrs x 7 days per week) in states with
per-minute only tariffs, such as Nynex and some US West
states, like Minnesota. Ann neglected to tell the
commission that in all states with a flat rate tariff, BA
was the most expensive, or that in many other US West states
the flat rate offererings are a fraction of the BA proposal
($40.86 was recently ordered in New Mexico, but is under
appeal, the Washington State flat rate is still $63 per
month). Nor did Ms Dean voluntarily mention the fact that
four Ameritech states have flat rates (tariffs with no per-
minute charges) in the $28 to $35 per month range. When
pressed on this point, Ms Dean singled out and then tried to
dismiss the Illinois tariff, by noting the surcharge for
calls beyond an 8 mile calling area. She needed to be
pushed by the Commission to explain that a 128 Kpbs (2B)
ISDN connection would count double under the "call pack"
usage options, meaning that the 20 hour option, for example,
would only provide 10 hours of usage at 2B. Ms Dean said
that most users would only need 60 hours of B channel use
(30 at 2b)
Ms Dean's recommended tariffs were slightly lower than BA's
and the Commission ordered them put into effect as of July
3, 1996, but following a spirited public hearing, which
featured a great deal of opposition to the BA filing by MD
Internet service providers, individual consumers, ISDN
experts, the Maryland Office of People's Counsel, and CPT,
the Commission ordered an investigation into BA ISDN costs,
on an expedited basis, which will likely lead to significant
reductions in the tariffs. Here were the Ann Dean proposed
tariffs, which are now in effect in Maryland:
Basic Usage rates:
Peak (7 am to 7 pm) - 2 cents per minute per channel
Off-Peak (7 pm to 7 am) 1 cent per minute per channel
Call Pack Options (Pre-Paid Usage Options)
Hours of single B channel
before per minute charges
apply (cut in half for 2B) Price
0 $25
20 $28
60 $35
140 $48
300 $74
500 $106
unlimited $236
Commentary
Bell Atlantic's new tariff filings were far lower than its
existing tariffs, which were priced by the 2 to 1 cent per
minute. Because of the high price (most users reportedly
spent about $100 per month) for the old tariffs, BA had only
sold about 450 residential ISDN lines, in a state which huge
potential demand. No one wanted to keep the old tariffs, so
it was never a question of keeping the old rates.
The Md Office of People's Counsel (OPC) had asked for full
Commission evidentiary hearings on BA's costs. Ann Dean, a
regulatory economist for the MD PSC Telecommunications
division, to me that she opposed such hearings, because she
had already studied the BA cost study (which has never been
available to the public, even under non-disclosure rules),
and was prepared to offer her recommendation (see above).
As a practical matter, most Commissions follow staff
recommendations very closely, largely because the
Commission's don't want to develop alternative proposals on
their own, so it was a major disappointment when Ms Dean
appeared out of here depth on the price comparisons (for
example, comparing BA's flat rate prices with nailed up
costs for states without flat rates, and total ignoring the
much lower ISDN voice/Centrex tariffs used even by the PSC
staff itself), and poorly informed on important demand and
usage issues (Did not factor in the double counting for 2B
connections, did not appreciate the types of new
applications that consumers are focusing on). At the very
least, however, her recommendations seem to make two
feasible packages much more attractive to some consumers
(the 60 hour option is now $35, and the 140 hour option is
now $48.)
More significant, however, the Commission overruled Dean,
and ordered a full scale PSC investigation into the Bell
Atlantic ISDN tariffs, on an expedited basis. In this new
proceeding, consumers may intervene, and present alternative
cost evidence. CPT plans to file a motion to intervene in
the proceeding later this month. The MD OPC is also expected
to intervene. One would hope that MD technology firms would
be represented in this proceeding as well.
james love (202-387-8030; love@tap.org)
Consumer Project on Technology
updates will be posted to:
http://www.essential.org/cpt/isdn/bellnews.html
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James Love / love@tap.org / P.O. Box 19367, Washington, DC 20036
Voice: 202/387-8030; Fax 202/234-5176
Center for Study of Responsive Law
Consumer Project on Technology; http://www.essential.org/cpt
Taxpayer Assets Project; http://www.tap.org
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