Verizon Proposes New Telephone Rates

OLYMPIA, Wash. - Verizon today filed a rate design proposal with the Washington Utilities and Transportation Commission (WUTC) for an increase in the basic monthly rate the company charges for telephone service. In April, Verizon filed its first general rate proceeding in 22 years and reported a revenue shortfall of $239.5 million a year. Verizon is seeking to restore its ability to reinvest in customer service.

"We need the resources to continue to give customers the quality service they expect," said Steve Banta, Verizon Northwest Region president. "The current outdated pricing scheme for regulated services no longer works in today's competitive environment. People have changed the way they communicate over the years to instant messaging, e-mail, voice calls over the Internet and wireless services. As a result, Verizon's revenues are no longer covering our expenses."

In April, Verizon asked the WUTC to conclude its review of the company's revenue shortfall before looking into specific rate change proposals. But the commission directed the company to file its rate proposals by July 23.

"The broader public policy issue here is to have the ability to make the investments needed to grow Washington's economy," Banta said. "Business and consumers alike benefit from a robust telecommunications network.

"But, as any Washington business owner knows, we need sufficient revenue to cover our costs and achieve a reasonable rate of return on our investments," he said.

Banta stressed that the proposal will not affect consumers in low-income households who are eligible for the Washington Telephone Assistance Program. These customers will continue to pay $8 a month for basic services.

Verizon's basic monthly rate would increase by $9.80 - from $13 to $22.80 for residential customers and from $29.70 to $39.50 for business customers. These and other proposed changes would generate about $109.8 million in revenue, which covers less than half the revenue shortfall under review.

The company's revenue shortfall was aggravated last year when the WUTC required a $29.7 million reduction in charges that long-distance carriers pay to use Verizon's network. The company is now losing money on its regulated services in the state. Despite Verizon's restricted ability to make a profit in Washington, it has invested $589 million over the last four years.

The commission also will review Verizon's request for an interim rate increase of $3.54 per customer line to recover the $29.7 million in lost long-distance access charge revenue. The interim rate increase would be discontinued after the commission rules on the company's revenue requirement.

Verizon customers will receive notices with their local telephone bills containing information on how to contact the WUTC to make comments on the company's rate filing and how to get information about public hearings on the Verizon proposal.

Verizon operates about 850,000 lines in Washington, most of them clustered in the Puget Sound area from Blaine to Redmond, as well as the Pullman, Tri-Cities and Wenatchee areas of Eastern Washington.

Verizon Communications

A Dow 30 company, Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services, with approximately $68 billion in annual revenues. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the largest directory publisher in the world, as measured by directory titles and circulation. Verizon's international presence includes wireline and wireless communications operations and investments, primarily in the Americas and Europe. For more information, visit www.verizon.com.

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