Public Advocate Requests Full Rate Investigation of Bell Atlantic by the Public Utilities Commission

March 13, 2000

The Public Advocate has filed a formal motion before the PUC strongly requesting that the Commission begin a rate case for Bell Atlantic on or before May 1, 2000. Since 1995, Bell Atlantic has been regulated under a five-year price-cap plan, which expires on December 1, 2000. According to the Public Advocate, the Commission will not be able to ensure that Bell Atlantic’s rates will be just and reasonable or that they will meet various legal requirements, unless the PUC first conducts a rate investigation. The law governing “alternative” regulation for Bell Atlantic requires that customers pay no more than they would under traditional cost-based regulation. The Public Advocate believes that the PUC must conduct a rate case in order to make the rate comparison required by law. “The PUC really needs to make sure that today’s phone rates are at a fair starting point for all customers, before establishing any new alternative form of regulation for Bell Atlantic” said Public Advocate Stephen Ward.

The Public Advocate urged the Commission to act immediately because a rate case normally takes nine months to complete. Currently, the Commission is left with slightly more than eight months, unless it extends Bell Atlantic’s current price-cap plan beyond December 1, 2000.

The Pubic Advocate notes that, under the current rate plan for Bell Atlantic, monopoly local rates have been allowed to increase by over 30%, even though Bell Atlantic has been required to reduce its overall revenues in each of the last five years. In addition, the Bell Atlantic/NYNEX merger occurred in the middle of the current five-year rate plan. Experts estimated that this merger would save the combined company over $850 million per year. The Public Advocate suggested that these large savings must be shared with ratepayers by setting new rates after a full investigation of Bell Atlantic’s costs.