The cost of Verizon’s residential telephone service would rise by $3.90 a month between May and July 2007 under a proposed compromise with state regulators announced Feb. 25.
The 30 percent rate increase would fall well short of Verizon’s original request last year to hike its standard telephone rate by $9.80 a month – a 75 percent increase.
Basic residential service now costs $13 without fees, taxes or other options.
“We know that increasing rates is never popular, but we believe the structure of the agreement will soften the impact on consumers,” said David Valdez, Verizon’s regional vice president of public affairs and policy, in a written announcement of the compromise.
If approved by the Washington Utilities and Transportation Commission, the rate increase would arrive in two phases. First, the price of basic residential and business service would go up by $2.43 a month starting in May. Then, in July 2007, the rate would rise another $1.47 a month.
The proposed settlement also would allow Verizon to charge more for other features, including directory assistance calls and custom calling services.
Verizon officials said last year that the company’s land-line service would continue to lose money without a rate adjustment. While the compromise calls for a much lower increase, it would provide Verizon’s operation in this state with an additional $38.6 million in annual revenue.
“It gives us a positive rate of return, which was certainly part of what we were looking for,” said Kevin Laverty, a spokesman at Verizon’s Northwest headquarters in Everett.
Simon ffitch, the assistant attorney general whose office represented consumers in the rate case, agreed the compromise rate was justifiable. His office adamantly opposed Verizon’s original request.
“This is, we think, much more fair to the customers than their original proposal,” ffitch said. “The two-year phase-in also helps to mitigate the rate impact.”
The rate increase is the first change in Verizon’s basic rate since 1982. There have been increases in other services and taxes.
Verizon said the proposed settlement was negotiated with the commission’s staff, the state Attorney General’s Office and other interested parties.
Those groups expressed strong opposition to the original request. Chances of getting a favorable ruling seemed to dim after the utilities commission rejected the company’s request last year for a $3.54 temporary rate hike while the larger one was considered. Utility commissioners said then that Verizon failed to prove that an immediate rate hike was needed to keep the company financially sound.
Verizon’s Northwest division serves about 850,000 customers from Snohomish County to the Canadian border and in other parts of the state.
Eric Fetters is a reporter with The Herald in Everett.
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