Most C&P customers buy rarely used service plans

May 03, 1991|By Leslie Cauley

An overwhelming majority -- 78 percent -- of Chesapeake & Potomac Telephone Co.'s residential phone customers in Maryland are paying for services they probably don't need, according to the Public Service Commission staff.

That is the bottom line on the Inside Wire Maintenance Plan and the Guardian Plan, the two optional maintenance services sold by C&P.

The Inside Maintenance Plan, which costs 85 cents a month per phone line -- $10.20 a year -- covers the cost for C&P to repair an inside wiring problem. Under the Guardian Plan, which costs $2 a month per line, or $24 a year, C&P will also loan a phone to a customer for up to 60 days and convert one old phone jack to a modular plug-in type at no charge.

According to C&P, 632,399 of the 1.8 million residential customers in Maryland subscribe to the Inside Wire Maintenance Plan, while another 740,535 customers subscribe to Guardian.

That translates into a lot of revenue for C&P, which last year raked in about $24.2 million from maintenance services alone.

But the problem with buying wiring insurance, for consumers, is that inside wiring rarely needs to be repaired, PSC staffers told the commission last week.

"Subscribers think that they need to subscribe to protect their telephone service and do not understand that the plans only include their inside wire, which is often very reliable," Joseph Ismail, a PSC communications engineer, told the commission last week as part of an ongoing case on C&P's cost and revenue allocation.

In written testimony, Scott Rafferty, director of the PSC's telecommunications division, also noted the "high reliability" of inside wiring in most households.

"Despite the high reliability of inside wiring, and the simplicity of checking a modular phone for trouble, almost 80 percent of Maryland's homeowners pay C&P between $10.20 and $24 a line every year for this insurance," Mr. Rafferty wrote.

The value of the $2-a-month Guardian plan was further brought into question by Mr. Ismail, who noted that most C&P subscribers already have modular jacks in their homes.

Mr. Ismail said C&P is successful in getting people to sign up for the optional maintenance plans, in part, by reminding them that C&P charges $56 for a 15-minute visit to non-subscribers who ask C&P to make a house call.

It isn't clear just how often that actually happens.

Al Burman, a C&P spokesman, said he didn't know how often consumers ask C&P to check for inside wiring problems. Likewise, Mr. Burman said he did not know how many times C&P repairmen have had to break out their tools to repair an inside wiring problem.

"No report gives that information readily," Mr. Burman said.

But some observers, including People's Counsel John Glynn, speculate that inside wiring is low on the list of consumer complaints -- so low that most people would probably be better off spending their money elsewhere.

"The incidence of actual inside wire problems is so small that you'd be better off saving up that two bucks a month and paying to fix it yourself in the unlikely event it ever breaks," said Mr. Glynn, whose office represents the interests of residential ratepayers before the PSC.

C&P contends the optional maintenance plans offer consumers something they couldn't easily get elsewhere, namely "convenience, peace of mind and security."

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