PSC offers settlement on Verizon phone service rates

February 03, 2010|By Gus G. Sentementes |

State regulators proposed on Wednesday that Verizon's ability to raise rates on some basic telephone services be directly tied to the telecommunications giant's efforts to improve customer service – a potential outcome that would be a regulatory first in Maryland.

The proposed order from the Maryland Public Service Commission comes amidst several ongoing cases dealing with complaints from tens of thousands of customers who experienced lengthy delays in customer service in 2007 and 2008.

In its proposed settlement, the PSC described its modified proposal, which Verizon has 20 days to approve or reject, as "less the end of a series of cases than the beginning of a new regulatory paradigm."

Verizon's ability to raise prices has never before been tied to customer service performance, but the PSC's proposed order is pushing for such a connection between service quality and revenue.

The PSC's order was a modification of a proposed resolution that Verizon filed in August, where it offered several measures, including payment of a $1 million penalty and an increase of certain fees and lowering of others for regional telephone service. The financial penalty would lead to affected consumers getting a credit of between a $2 and $10 on their phone bills.

Verizon, Maryland's largest telephone company, has also been seeking more flexibility to change prices on company phone services that are also provided by competitors who don't face the same regulatory scrutiny.

If Verizon rejects the PSC proposal over the next 20 days, the six consumer-related cases before the commission would resume.

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