Verizon would pay $1 million to address customer complaints in Maryland, increase some fees and lower others for regional telephone service, and deregulate some bundled products under a settlement that the company and members of the Public Service Commission staff are proposing to state regulators.
The settlement is designed to deal with thousands of consumer complaints about the telephone company that emerged in 2007 and spurred a PSC investigation into Maryland's largest telephone provider. According to written testimony provided to regulators, nearly 80,000 customers had to wait more than four days for repairs after losing their phone service in 2007 and 2008.
In exchange, Verizon executives are seeking more flexibility to change prices on company phone services that are also provided by competitors that do not face the same regulatory scrutiny. Verizon wants to be able to adjust prices more quickly on bundled packages of telephone services, based on market conditions.
Such a move would provide a measure of deregulation in the state's telephone market.
The Maryland Public Service Commission will hear testimony on the settlement agreement during hearings next week. If the settlement is approved, Verizon would raise rates for basic dial-tone service by $1 a month in July but freeze rates for the next three years. In 2012, the company could raise rates by up to $12 each year.
Basic telephone service is the bare-bones calling option that typically costs $6 to $15 a month. At least one-third of Verizon's more than 2 million customers have basic telephone service rather than a bundle, said John R. Gilbert, vice president for regulatory affairs.
In exchange for those moves, Verizon would provide bill credits to customers who complained in 2006 and 2007 about poor response on repairs. Customers who waited more than four days for service to be restored would receive a $10.88 credit; about 47,000 who waited for technicians who did not show up for appointments would receive $2.77.
The company also would allow disabled or senior customers without land-line alternatives to preregister for priority repairs. And the company would pay penalties of up to $4 million to customers if it misses service targets in the future.
Verizon also would cut the rate that customers in the region pay to avoid long-distance charges to areas such as Washington, Annapolis and Bel Air. Customers in those locales can pay $14 a month to avoid the added charges. Under the proposed settlement, Verizon would lower that fee to $2 a month for those who subscribe to bundled packages.
