Verizon Cites Alternative Regulation Plan Benefits for Maryland Consumers

BALTIMORE -- Verizon submitted testimony today that the alternative regulation plan adopted in 1996 by the Maryland Public Service Commission (PSC) has been successful. The PSC will review Verizon's existing plan to evaluate its success and determine what modifications are appropriate.

Under the current form of regulation, prices rather than revenues are regulated and Verizon has greater incentive to invest in the telecommunications network and bring new service offerings to consumers. "The plan has worked well for Maryland consumers, the Maryland economy and Verizon," said William R. Roberts, president of Verizon Maryland.

"Verizon's plan has protected consumers by maintaining affordable and reasonably priced local phone service," Roberts said. "The plan has also ensured the quality, availability, and reliability of telecommunications services throughout the state."

Although Verizon is proposing certain modifications to the existing plan in order to reflect competitive activity in the telecommunications market in Maryland in recent years, Roberts stressed in testimony filed today that Verizon is not proposing any changes to existing residential basic local service rates. In fact, Maryland customers have not experienced an increase in basic service rates since 1985.

"Consumers in Maryland have benefited from stable basic phone rates for 17 years, even while incomes in the state have risen by 106 percent and the average price of other goods and services has risen by nearly 65 percent," Roberts said.

Verizon's performance under the plan has permitted it to make numerous contributions to the state, including:

• $3.3 billion in investment in the Maryland telecommunications network;
• an additional 1,100 employees on the payroll;
• more than $1 Billion in state taxes.

"There have been significant changes in the marketplace since 1996 that merit review by the PSC," Roberts said. "Then, as now, Verizon was operating in an industry that was undergoing enormous changes brought about by numerous legislative and technological developments. In many ways, the changes we face today are more challenging than ever before."

To respond to these changing needs in the marketplace, Verizon asked the PSC to retain the existing regulatory plan, but to adapt it to reflect the increased competition and uncertainty that's a part of doing business today.

Among the changes Verizon proposes are the elimination of the price cap index and the reclassification of all business services and intraLATA toll service as competitive. "With these modifications, the alternative regulation plan can ensure that Maryland continues to reap benefits and Verizon continues to compete effectively in the telecommunications marketplace," Roberts said.

Verizon Communications (NYSE:VZ) is one of the world's leading providers of communications services. Verizon companies are the largest providers of wireline and wireless communications in the United States, with 135.1 million access line equivalents and 30.3 million Verizon Wireless customers. Verizon is also the largest directory publisher in the world. With more than $67 billion in annual revenues and approximately 241,000 employees, Verizon's global presence extends to more than 40 countries in the Americas, Europe, Asia and the Pacific. For more information on Verizon, visit www.verizon.com.

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