"We want to make sure that the customers are protected in terms of their access to the phone network and to have some good assurances they will have services at a reasonable price," said Theresa Czarski, a deputy in the Office of the People's Counsel, which represents Maryland consumers. The People's Counsel, along with commission staff members, negotiated the agreement with Verizon.
She said the decision to allow Verizon more flexibility on bundled plans was designed so the company does not push legislators for full deregulation of the state's telephone market. "That to me would be the worst outcome," Czarski said.
PSC spokeswoman LaWanda Edwards said she could not comment about matters before the commission. However, in written testimony, staff members said the settlement would provide affordable, quality and available service and would spur competition.
William R. Roberts, Verizon's regional president, said the company is subject to regulations set by the Public Service Commission, unlike cable and other businesses that have begun offering telephone services. Amid rapid advances in technology, Verizon is less a telecom these days and more like an information and entertainment company, he said.
But "from a regulatory perspective, they'd like to treat us like a basic utility, whereas other competitors are not hamstrung by the same regulations," Roberts said.
For example, Verizon wants the PSC to reduce the time required to alert regulators about pricing changes to bundled services. The company wants its 30-day requirement to be cut to 24 hours so it can adapt to competition, Roberts said.
Commission members will hear testimony on the settlement proposal in their Baltimore offices Feb. 12 and 13, and will issue an order later. The agreement would settle four matters before the commission as well as a lawsuit filed by Verizon against the PSC.
The PSC began its investigation of service complaints against Verizon in 2007, after consumers filed more than 300 complaints by July of that year about canceled or missed repair appointments and long waits to restore service.
The company responded with ways it planned to improve repair responses, including moving workers from installing new fiber-optic lines to repairing traditional services, increasing overtime and retraining call center staff.
Edwards, the PSC spokeswoman, said consumers filed more than 900 repair complaints from August 2007 to August 2008.
"We haven't been perfect in the past, and we'd like to do better," Gilbert said. "The real penalty we face is customers leave us."
SUGGESTED FIXES
Highlights of the settlement proposed by Verizon and PSC staff:
Rate increases: Verizon would increase monthly rates for basic residential dial-tone service by $1 in July, then freeze rates for the next three years. In 2012, the company would be able to raise rates by up to $12 a year. Business rates would increase $2.
Service quality: Verizon would give $1 million in bill credits - from $2.77 to $10.88 - to customers affected by long waits for repairs in 2006 and 2007.
Local calling areas: Residents who live outside Baltimore, Annapolis or Washington now pay an extra $14 monthly for a local telephone number and local calling rates to those cities. Under the settlement, they could pay $2 a month if they sign up for a Verizon bundled package.
