Delaware Stay

[Scott Rafferty <Rafferty@cris.com>]

  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 
  appeal?
  --Scott Rafferty