Verizon’s rate request and a changing market

When it comes to throwing darts at industry, has there ever been a bigger target than the telephone company? The image of an arrogant, bloated monopoly is legendary.

So it’s easy to sneer at Verizon Communications’ bid for an eye-popping rate increase of 75 percent, a request that includes a smaller, interim hike. The latter would raise residential rates for a local phone line from $13 to $16.54 per month. The permanent rate request would bring the monthly charge to $22.80.

Staggering as that last number is, it must be considered in the context of a rapidly and dramatically changing telecommunications world. Wireless technologies and broadband Internet connections are giving consumers exciting new choices in phone service. Thousands are taking advantage, and that number will no doubt grow exponentially.

That means that fewer people are hooking into the traditional local telephone network, opting instead to use just a wireless phone or the Internet. Verizon figures it’s losing around 2,000 customers a month. In other words, fewer customers are paying into a network that must continue to be maintained – and that will require investment to keep up with the latest innovations and service expectations. It’s not a model for business success.

And while we’re not shedding tears for one of the world’s telecommunications giants, we recognize that if Verizon can’t earn a reasonable profit on local phone service, at some point it will be forced to compromise on service, or even sell its local phone service operations here. That would mean the loss of one of Snohomish County’s most generous corporate citizens.

The company’s interim request for a $3.54 monthly hike in residential service seeks to restore money it lost when the state Utilities and Transportation Commission last year lowered the amount long-distance companies had to pay for access to local networks.

The company’s case for the interim rate hike is valid, and the UTC, which regulates phone rates, should approve it. The larger, permanent request won’t be heard until next year. We’re more skeptical about that case, but the reality of changing market forces can’t be ignored. The commission should seek to strike a fair balance between allowing Verizon to make a reasonable profit and protecting consumers from an overwhelming rate shock.

Local phone service is the most reliable means of communication available. When the electricity goes out, it’s likely your wired telephone will still work because the network has backup power. And when you call 911 from your landline, emergency workers can quickly pinpoint your location.

Reliability costs money, and consumers understand that. There’s room in these rate cases for a fair solution.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Opinion

toon
Editorial cartoons for Friday, Feb. 7

A sketchy look at the news of the day.… Continue reading

Curtains act as doors for a handful of classrooms at Glenwood Elementary on Monday, Sept. 9, 2024 in Lake Stevens, Washington. (Olivia Vanni / The Herald)
Editorial: Schools’ building needs point to election reform

Construction funding requests in Arlington and Lake Stevens show need for a change to bond elections.

Schwab: Trump proves not as bad as feared; it’s worse

Taking food and medicine from kids; surrendering control to Musk; is this what you voted for?

Keep necessary homeless service program at its Everett location

Regarding The Herald’s front-page coverage of the Hope ‘N Wellness community services… Continue reading

We can’t afford the rich not paying their fair share

In a recent column, Todd Welch claims that a wealth tax on… Continue reading

Can we find a politically moderate path, please?

I was just wondering what happened to the moderates. I am a… Continue reading

Kristof: World’s richest men take on world’s poorest people

Trump says the USAID is run by ‘radical lunitics.’ Is saving countless lives now lunacy.

FILE- In this Nov. 14, 2017, file photo Jaìme Ceja operates a forklift while loading boxes of Red Delicious apples on to a trailer during his shift in an orchard in Tieton, Wash. Cherry and apple growers in Washington state are worried their exports to China will be hurt by a trade war that escalated on Monday when that country raised import duties on a $3 billion list of products. (Shawn Gust/Yakima Herald-Republic via AP, File)
Editorial: Trade war would harm state’s consumers, jobs

Trump’s threat of tariffs to win non-trade concessions complicates talks, says a state trade advocate.

A press operator grabs a Herald newspaper to check over as the papers roll off the press in March 2022 in Everett. (Olivia Vanni / The Herald file photo)
Editorial: Push back news desert with journalism support

A bill in the state Senate would tax big tech to support a hiring fund for local news outlets.

Jayden Hill, 15, an incoming sophomore at Monroe High School is reflected in the screen of a cellphone on Wednesday, July 10, 2024 in Monroe, Washington. (Olivia Vanni / The Herald)
Editorial: Students need limits on cellphones in school

School districts needn’t wait for legislation to start work on policies to limit phones in class.

toon
Editorial cartoons for Thursday, Feb. 6

A sketchy look at the news of the day.… Continue reading

Lake Stevens school bond funds needed safety work at all schools

A parent’s greatest fear is for something bad to happen to their… Continue reading

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.