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Bell Atlantic was granted a stay of the $28.02 unlimited ISDN rate Friday.
Pending a court appeal, Bell Atlantic will continue to charge $1800 a month.
Bell Atlantic argued that its due process rights were violated because the hearing did
not consider additional usage packages (including $249 unlimited), which it filed
"based on market experience" 3 months after the public comment hearing and two days
before the final technical hearing.
At the technical hearing, Bell Atlantic objected to the Public Advocate being allowed to
attack the $249 rate. The hearing examiner sustained this objection, allowing Bell
Atlantic to create their own due process problem. However, our position was that the
rate for a monopoly service must be based on cost, not what the market will bear -- so
that about $20-30 was the maximum allowable. That position prevailed. The hearing
examiner found that it was unnecessary to address the $249 rate, since it had never been
charged to anyone.
On the stay, we argued that Bell Atlantic cannot divest the Commission of its
rate-making power by filing a "supplemental" proposal two days before the hearing. A
contrary rule means that a utility could change its proposal at the beginning of each
hearing, forever delaying a decision -- during which time it would charge the initial
rates that it set for itself. We also argued that "market experience" was irrelevant,
since the Commission properly found that rates for this monopoly service should be based
on cost. Since Bell Atlantic's new evidence was untimely and legally irrelevant, there
was no due process violation. Also, there was no irreparable injury (the requirement
for a stay) because Bell Atlantic only had seven customers and had made no showing that
any of them bought substantial usage (at 4 cents a minute). (Anecdotally, the only one
that we knew about, Stewart Dickson, had left the state since the hearing - but this was
not in the record.) We argued: "Unless the seven customers are willing to buy
substantial usage at the enormously inflated rate of 4 cents a minute, the Commission's
rate may well produce more revenues").
Staff argued that Bell Atlantic stood to lose revenues $108,000 a year, but no to worry
because this would not threaten the "financial integrity" of Bell Atlantic. This
assumes that all seven customers are on full time, which we disputed. ($108,000 equals
$1800 a month times seven customers times 12 months.) It sounded like a lot of money to
the judge, who granted the stay.
I anticipate that Bell Atlantic will try to reduce its rates to $249. There is a
concern that if reduced to this level, the appeal may go on indefinitely and we may
never see $28.02. Would many people be benefited by $249 rate, or should the rates
stay at there currently absurd levels while we try to unravel Bell Atlantic's claims on