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Public Service Commission's Decision Sends Telecom a Message: Don't Invest in Florida

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TAMPA, Fla. - The Florida Public Service Commission today adopted its staff's recommendation to lower by 26 to 31 percent the wholesale rates Verizon charges competitive phone companies. The rates, referred to as the Unbundled Network Element rates (UNE), represent the amount Verizon is permitted to collect from competitors to use its local network. The Federal Communications Commission first established the original rates shortly after the Telecommunications Act of 1996. Those rates used a pricing methodology adopted by the FCC to arrive at a wholesale rate that would theoretically reflect the billions of dollars invested in the local network by Verizon while also allowing competitors fair access to the incumbent's customer base. The FPSC first lowered this rate for Verizon in Florida in 2000. Today's move further reduces wholesale prices. The following response should be attributed to John Blanchard, president-public policy and external affairs, Southeast region, Verizon.

"Today's decision by the Public Service Commission is nothing more than regulatory welfare. Without investing one thin dime, some 40 competitors in the Verizon service area will use this change to realize a three or four-fold increase in their bottom line. No additional costs will be incurred, no construction dollars will be committed and no jobs will be created. Worse still, punitive pricing policies like those adopted in Florida today discourage investment in the very network required by both Verizon and the competitive phone industry. Our ability to support future network advancements that serve both our customers and our competitors has been considerably weakened.

"Verizon supports competition based on proven economic principles, competition that creates market-driven margins, competition that creates capital investment and jobs. Today's decision does none of those things and will only harm the objective of a truly competitive marketplace."