Verizon Allowed to Raise Basic Phone Rates in NJ

NEWARK, N.J. (AP) - July 11, 2008 For the first time since 1985, a state utilities board has approved increasing the rate. The total monthly cost for basic residential service could rise from $18 to $27 over the next three years. Basic services for businesses with just one phone line could rise from about $26 to about $38 a month. Both totals include taxes and fees. "Those that are affected should see the change in their September bills," said Doyal Siddell, spokesman for the New Jersey Board of Public Utilities. The board on Friday unanimously approved an agreement that allows the BPU to continue regulating basic rates but lets the phone company increase some of their other rates, including call forwarding and three-way calling. Verizon had asked the board to rule that all Verizon's services are competitive, which would have allowed the company to set its own rates for all services. The Public Advocate's Office opposed that, arguing residents and small businesses don't have a real choice in selecting basic phone service. The BPU said its ability to approve rates will ensure poor people and elderly customers with fixed incomes can afford to keep basic phone service. "This agreement protects New Jersey ratepayers who only use basic telephone service from the price increases that would inevitably come from deregulation," said Public Advocate Ronald K. Chen. "The basic rates are still below the national average for basic telephone service." Currently, residential customers pay $8.95 per month for basic service, or $18.45 including taxes and fees. The agreement allows increases in the basic rate in each of the next three years, but to no more than $16.45, or $26.69 including taxes and fees. According to the board, the inflation-adjusted cost of basic service today would be $29.43. Meanwhile, the board also is allowing slight increases in charges for directory assistance and service installation. Installation costs will jump from the current $42 to no more than $50 in the third year. Customers who now get four free directory assistance calls will be allowed only two; fees after that will jump from 50 cents per call to a maximum of $1.50 per call in the third year.