[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]
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).
Jamie
The Maryland ISDN Proceeding and the dispute over
ISDN Call Pack Fill Rates
July 22, 1997
James Love <love@cptech.org>
http://www.cptech.org
202.387.8030
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