Analyst calls it a “stealth, sweetheart agreement”; Verizon and state official trade barbs
Customers and industry watchers are crying foul regarding a pending regulatory action that could de-regulate Verizon Communications’ landline services, potentially hurting rural customers.
The pending deal between Verizon New Jersey and the New Jersey Board of Public Utilities – the group responsible for authorization, a vote on which is set for today – would remove price regulation for home telephone service, businesses with single-line service, charges for residential connection and directory assistance.
Jack Cimprich, mayor of Upper Pittsgrove Township, wrote to the BPU to express his concerns, according to NJ.com.
From his letter: “I am extremely concerned about Verizon’s attempt to lower landline quality standards and I ask the BPU to reject such changes.”
In a blog post on Huffington Post, Bruce Kushnick, executive director of the New Networks Institute, called it a “stealth move” allowing Verizon “to raise rates up to 36% and remove basic consumer safeguards. Done as a ‘stipulation agreement’ that was signed on May 6, 2015, the state has failed to properly notify even the state Rate Counsel, [New Jersey’s] consumer advocate office.”
Rate Counsel Director Stefanie Brand opposes the agreement and told NJ.com, “The term reclassify is a fancy word for deregulate. So there is absolutely no question under that statute that when services [are] reclassified, it means the board loses its ability to regulate those services.”
Brand borrowed the term “reclassify” from Verizon spokesman Lee Giercynski, who said the move will reclassify the services in questions.
“Which means we have more flexibility to make changes to pricing without BUP’s approval. Stefanie Brand can say what she wants to say, but she’s been part of this proceeding since 2011 and they have not presented any evidence to support that claim,” Giercynski said.
If approved by the BPU, Verizon will be capped at annual increases of $6 per month for the first five years.
After that, Brand said, the carrier could charge “whatever they want,” according to reports.
Kushnick wrote that the potential rate hikes are just one part of a puzzle that also includes long promised but never delivered upgrades to the Verizon fiber optic network in the Garden State.
He said that by 2010 Verizon was supposed to have 100% of the state connected via fiber.
“Verizon collected over $15 billion to $16 billion in extra phone charges … and tax perks by 2013 to pay for this construction … and yet left about [half] of New Jersey incomplete,” including schools, libraries and other public facilities.
For his part, Kushnick is calling for the New Jersey Attorney General to investigate both Verizon New Jersey and the New Jersey Board of Public Utilities.
“The fact that the state never examined the actual laws that required Verizon NJ to upgrade to fiber optics in their entire territory, and now wants to give them a new sweetheart deal, clearly shows that the Garden State needs an exterminator to get rid of the harmful pests,” he said
