[Date Prev][Date Next][Thread Prev][Thread Next][Date Index][Thread Index]

Maryland orders investigation into BA ISDN costs

  INFO-POLICY-NOTES - Subscriptions from listproc@essential.org
  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
  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:
  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