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BACKGROUND -- In a filing with the Pennsylvania Public Utility Commission (PUC), Verizon yesterday submitted results of revised cost studies and wholesale rates that competitors would pay when they lease portions of Verizon's network to provide local telephone service to their customers. A PUC administrative law judge last month directed Verizon to make changes to the cost studies Verizon had filed in December 2001 on these wholesale rates or "UNEs." The PUC will consider the judge's recommendations as it reviews Verizon's wholesale rates. A decision on the rates is expected late this year. Today, AT&T attacked Verizon and the revised proposed wholesale rates in a news release. The following statement should be attributed to Debra Berry, director-regulatory planning for Verizon Pennsylvania.
"These new proposed wholesale rates, calculated by Verizon in compliance with the judge's recommendations, understate what it actually costs Verizon to provide the services.
"The fact that these proposed wholesale rates are generally higher than the UNE rates competitors currently pay us to lease parts of our network only reinforces the extent to which Verizon has been subsidizing our competitors all along, by charging wholesale rates significantly below our costs. This subsidy should not continue, as it will impede long-term competition by diminishing any incentive by Verizon or competitors to invest in the Pennsylvania telecommunications infrastructure.
"Despite this subsidy, AT&T continues to whine because it's not getting even lower rates with a larger subsidy. The truth is that the biggest barrier to AT&T's entry into Pennsylvania's local market is AT&T's own business plan. Competition in Pennsylvania's local phone market is flourishing. The PUC, U.S. Department of Justice and Federal Communications Commission all have found this to be the case.
"AT&T's temper tantrum about the revised rates is yet another example of that company's stubborn strategy to complain rather than compete."