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Maryland ISDN proceeding

     The following is a brief note regarding the current proceeding for
  setting ISDN tariffs in Maryland.  It is a bit hard to follow, and I
  apologize for that.  The issues raised in the Maryland ISDN proceeding
  are the same for all Bell Atlantic states, which are based upon the same
  pricing model, and also all US West states that use the "call pack"
  approach to setting ISDN tariffs (pre-paid blocks of usage allowances,
  combined with high per minute fees for usage that exceeds the call packs).  
  The Maryland ISDN Proceeding and the dispute over
       ISDN Call Pack Fill Rates
       July 22, 1997
       James Love <love@cptech.org>
  The major dollar dispute in the Maryland ISDN proceeding concerns the
  assumptions regarding average usage of so called "call pack" options. 
  Basically, the Maryland ISDN tariff is set up so that you either pay
  hefty 2 or 1 cent per minute charges for each ISDN call, or you pre-pay
  for usage, in "call packs."  The two most popular call pack options for
  Maryland would involve 60 or 140 hours.  The user who subscribes to the
  call pack option has to pay the 2 to 1 cent per minute fees if the user
  exceeds the call pack.  Since no one wants to pay the 2 to 1 cent per
  minute fees, which add up in a hurry, nearly all Maryland consumers use
  the call packs.  The question is, how should the Maryland PSC tariff the
  call packs?  
  (note, ISDN usage is calculated by B channel.  128 Kbps connections
  require 2B connections).  
  The Maryland PSC staff says that Bell Atlantic's costs for usage are, on
  average, somewhere between $.0017 and $.003 per minute, which includes a
  nice contribution on top of direct costs.  Assuming one accepts the per
  minute usage costs (they are high, because they don't account for lower
  costs of off peak usage), you still have to figure, how many minutes (or
  hours) does a call pack customer actually use in a given month?
  This dispute is about the "fill rate," which is a term to describe the
  ratio of hours actually used, to hours of pre-paid usage purchased.  For
  example, a consumer who used 40 hours of a 140 hour call pack would have
  a fill rate of 40/140 = 28.6 percent.
  The Maryland PSC staff has just filed a brief with the Commission
  arguing that it is reasonable to assume that residential ISDN consumers
  will use, on average, 90 percent of pre-paid "call pack," and that they
  will never exceed the call pack.  Thus, the Maryland PSC staff seems to
  believe that all Maryland consumer who buy the 140 hour call pack will
  use an average of 126 hours each month, and no one will ever exceed the
  140 hour usage allowance, and pay the hefty 2 to 1 cent per minute fees
  for exceeding the call packs.
  In a similar ISDN proceeding in NJ, BA provided data from Maryland ISDN
  call pack customers.  That data was used in the NJ case to argue that a
  more reasonable assumption for fill rate would be 30 percent.
  I am now working on a study of 196 telecommuters in Arizona, who use the
  US West 200 hour call pack.  These telecommuters are broken down into
  four groups, which are described a:
  1.  almost exclusively workaholic engineers
  2.  non technical managers and non engineering
  3.  information systems personnel, including managers
  4.  mixed users, engineering and non engineering
  I haven't finished the AZ study yet.  However, I can report that using
  June 1997 data, for the entire group of 196 telecommuters, the average
  fill rate was 25.6 percent.  For (1), the workaholic engineers, which
  were very heavy users, the fill rate was 37.5 percent.  For groups
  number 2 and 3 (which are more typical of a mass market) the fill rate
  was about 20 percent.  It is also interesting that 5 of the 196 users
  exceeded the 200 hour Call Pack allowance.  The overage by the 5
  amounted to 4.6 percent of all usage for the 196 users, and generated a
  very large amount of revenue to US West, due to the high fees charged
  for overage (fees 10 to 20 times USWest costs).
  If the Maryland PSC allocates even 25 percent of the Loop costs to
  interstate toll (the percent Bell Atlantic claims in FCC proceedings),
  and uses a 30 percent fill rate assumption for its call pack options,
  Maryland ISDN tariffs for most users should be priced below $30 per
  month. CPT's appeal in this case is at:
  http://www.cptech.org/isdn/mdappeal.html (no period.)
  Today I talked with Steve Molnar (410.767.8052), the Maryland PSC
  Director of Telecom, to ask why the Maryland PSC staff insists on
  backing Bell Atlantic's ludicrous assumption of a 90 percent average
  fill (with no overage), and why they opposed our request that the
  Maryland PSC simply ask Bell Atlantic to disclose the actual average
  fill for its existing ISDN call pack customers, and use the actual
  average rather than the unsupported 90 percent assumption.  Mr. Molnar
  said that the staff had no obligation to justify its adoption of the 90
  percent figure, and that it was up to us to persuade the Commission that
  it should be something else.  This won't be easy, because the record
  closed in the Maryland ISDN proceedings before Bell Atlantic disclosed
  anything about the fill rate (despite discovery requests).  
  Now this is up to the Maryland PSC
  The Maryland PSC home page is at:  
  http://www.psc.state.md.us/psc/home.html (no period).  The names,
  telephone numbers and Bio's of the Commissions are given below.  You can
  call the Commissioner directly, or write them, at:
       Maryland Public Service Commission
       William Donald Schaefer Tower
       6 St. Paul Street
       Baltimore, MD 21202
       (410) 767-8000
       MD Toll Free 1-800-492-0474
       MD Relay Service 1-800-735-2258 (TT/Voice) 
  Short Biographies - Commissioners
  H. Russell Frisby, Jr., Chairman 
       (410) 767-8072: born December 28, 1950 in Baltimore, Maryland;
  Swarthmore College (B.A. in Political Science), Yale Law School (J.D.);
  Associate, Cable, McDaniel, Bowie and Bond (1975-77); Assistant Attorney
  General of Maryland (1977-79); Attorney-Advisor, Federal Communications
  Commission (1979-80); Legal Assistant to Commissioner Joseph R. Fogarty,
  Federal Communications Commission (1980-83); Senior Attorney, Weil,
  Gotshal and Manges (1983-86); Principal, Melnicove, Kaufman, Weiner &
  Smouse (1986-89); Partner, Venable, Baetjer and Howard (1989-95);
  assumed position as Chairman July 14, 1995, current term ends June 30,
  1998; married (June), two children. 
  Claude M. Ligon, Commissioner 
       (410) 767-8116: born June 28, 1935, in Baltimore, Maryland; Morgan
  State University (B.S. in Mathematics), University of Illinois (B.S. in
  Civil Engineering), University of Maryland (M.S., Ph.D. in Civil
  Engineering); United States Army Engineer Officer (Lt. Col.) (1957-79);
  Manager of Civil Engineering and Transportation Systems Division of AMAF
  Industries, Inc. (l979-85); assumed position as Commissioner February 4,
  1985, current term ends June 30, 2002; married (Doris), two children. 
  E. Mason Hendrickson, Commissioner 
       (410) 767-8070: born February 11, 1922, in Frederick, Maryland;
  University of Maryland (B.S. in Business); U.S. Army Air Corps Combat
  Fighter Pilot (l942-45);  Senior Officer of 1st National Bank of
  Maryland (1967-87); assumed position as Commissioner June 1, 1992,
  current term ends June 30, 2000; married (Virginia), three children. 
  Susanne Brogan, Commissioner 
       (410) 767-8099: born March 29, 1957, in Chestertown, Maryland;
  Washington College (B.A.), University of Maryland (J.D.); Legislative
  Assistant to Speaker of the House of Maryland General Assembly
  (1986-92); assumed position as Commissioner November 1992, current term
  ends June 30, 2001; married (David Bliden). 
  Gerald L. Thorpe, Commissioner 
       (410) 767-8073, born March 1, 1938, in Pontiac, Michigan; Wayne
  State University (B.A., Ph.D.), Harvard University (M.A.). Professor of
  Public Policy and Director of the Center for Policy Studies, Indiana
  University of Pennsylvania (1970-80); Deputy Director of the Governor's
  Office of Policy and Planning in Pennsylvania (1983-86); Executive
  Director of the Maryland Energy Administration (1991-94); assumed
  position as Commissioner September 14, 1994, current term ends July 1,
  1999; married (Connie), three children. 
  James Love
  Center for Study of Responsive Law
  P.O. Box 1936, Washington, DC 20036
  voice 202.387.8030; fax 202.234.5176
  http://www.cptech.org  |  love@cptech.org