EVERETT – Verizon Communications says that providing basic phone services in Washington has become a money-losing business, requiring large rate increases just to reach the break-even point.
David Valdez, vice president of public policy and external affairs for Verizon’s Northwest division, said Tuesday the company faces an “immediate and substantial financial problem.”
But consumer advocates and a number of local residents argued at the public hearing in Everett that the 27-percent proposed increase is too much for some customers to comfortably handle.
“Put yourself in the shoes of those who may be on a fixed income or who may be struggling month to month,” said Teresa Rugg of Snohomish. “Please do not further the gap between the haves and the have-nots.”
The Washington Utilities and Transportation Commission is scheduled to decide as soon as September whether Verizon can raise monthly rates for residential and business lines by $3.54.
That “interim” increase is the first of two rate adjustments the company is seeking for its regulated telephone services.
Of those who spoke during Tuesday night’s hearing, sentiment was almost evenly divided. A number of officials from local chambers of commerce and nonprofit groups testified that Verizon is a good corporate citizen that deserves rate increases to keep the county’s telecommunications network working well.
“Most importantly, in my opinion, is the company’s ability to provide essential telecommunications infrastructure for both residential and business customers,” said Louise Stanton-Masten, president of the Everett Area Chamber of Commerce.
Several groups are opposed to the rate increase, however, including AARP, a coalition of business customers and a consumer group.
Simon ffitch, public counsel with the state Attorney General’s Office, said Verizon shouldn’t get any increases until its rates are fully reviewed by the utilities commission next spring.
“Our fundamental position is that Verizon doesn’t face an immediate financial emergency,” ffitch said. “Verizon is, by any definition, a very healthy telecommunications company.”
Verizon filed for the interim rate increase four months ago. Last month, it requested a permanent rate increase that would raise residential phone service costs by 75 percent, or nearly $10, a month.
If Verizon is granted an interim increase, that adjustment would disappear when the utilities commission rules next year on the permanent rate request. That would be true even if the commission decided against any permanent increase.
Valdez said the company’s troubles here can be traced to a utilities commission decision last year that cut in half the fees Verizon can charge long-distance carriers for use its network. That cost Verizon $29.7 million annually – the amount that would be raised by the interim increase.
Also, Verizon has gone from adding 4,000 phone lines a month in 1989 to losing more than 2,000 customers a month as telecommunications choices expand. During that period, the basic rate charged by Verizon didn’t substantially change, Valdez added.
Steve Burling of Snohomish said more customers might stay with Verizon if its service improved. He said he’s had problems with his phone line for two years.
“I oppose this increase until I can see from Verizon what they’re going to do to improve their service, at least in my neighborhood,” he said.
Reporter Eric Fetters: 425-339-3453 or fetters@heraldnet.com.
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