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WASHINGTON - In a move that will bring New Jersey residents and businesses the benefits of all-out competition for their telecommunications services, Verizon Communications today filed an application with the Federal Communications Commission (FCC) to offer long-distance service in the state.
"This is our strongest, most compelling filing in a long line of strong, successful filings," said Tom Tauke, senior vice president of public policy and external affairs for Verizon. "There is absolutely no doubt that we've met or exceeded all the federal requirements for FCC approval."
New Jersey becomes the sixth state where Verizon has applied for approval to offer long distance. As a former regional Bell company, Verizon must get FCC approval before it can offer long distance in the Northeast and mid-Atlantic states where it provides local phone service.
The FCC has 90 days to review Verizon's long-distance application. The New Jersey Board of Public Utilities (BPU) and the U.S. Department of Justice will provide their recommendations to the FCC before it makes its final decision.
"New Jersey consumers deserve the competitive savings their neighbors in New York and Pennsylvania enjoy," Dennis Bone, president of Verizon New Jersey said. "As in those neighboring states, Verizon's entry into long distance will stimulate real competition, not only in long distance, but also in local service.
"There is no reason why consumers should wait for the proven savings. In fact, any delay would only play into the hands of long-distance companies that have shown they only compete vigorously to win local phone customers when they no longer have a stranglehold on the long-distance business."
Consumers in New Jersey would save as much as $18.44 per month in long-distance charges alone if Verizon is allowed to enter the long-distance market, according to an independent study by the Telecommunications Research and Action Center (www.trac.org). The study projects annual savings for New Jersey consumers of between $22 million and $167 million on their long-distance bills in the first year after Verizon enters the market. Low-volume and daytime callers, including low-income and elderly residents, would see most of these savings.
Another TRAC study found that consumers in New York are saving up to $700 million annually in local and long-distance charges since Verizon began providing long-distance service in the Empire State in January 2000. Similarly, an FCC study last May found that local competition in New York and Texas increased dramatically in the first year after the FCC approved long-distance applications by former Bell companies in those states.
Under the FCC rules, in approximately 20 days the BPU may file an opinion with the FCC on whether Verizon has opened its network and systems to competitors as required by the Telecommunications Act of 1996. The act contains a 14-point competitive checklist of requirements for demonstrating that markets have been opened.
"Based on the overwhelming evidence, we're confident the board will find that we have more than complied with the checklist," said Bone.
Bone said the BPU has conducted a rigorous and thorough review. KPMG Consulting, an independent consulting firm hired by the BPU, conducted a 19-month review of Verizon's operations support systems. The firm evaluated 536 different aspects of Verizon's systems that competitors use when they switch local customers' service from Verizon. The real-world tests found that Verizon satisfied the test criteria on every one.
Verizon's bid has the support of the Communications Workers of America as well as community, business and political leaders from more than 50 organizations. In addition to chambers of commerce, these supporters include business leaders, and representatives from organizations that provide services to the state's minorities, the elderly and the disabled.
In December 1999, Verizon (then Bell Atlantic) became the first Bell company to gain FCC approval to offer long-distance service in its own service area when it won federal approval for New York, enabling the company to provide one-stop shopping for domestic and international telecommunications services to all its customers there. Earlier this year, the company received FCC permission to provide long distance in Massachusetts, Connecticut and Pennsylvania. Verizon also has a long-distance application seeking long-distance approval for Rhode Island pending at the FCC. The commission will rule on that application by Feb. 24.
Tauke said the company is following the same process in New Jersey that it has used in several other states. He noted that in the filings in New York and Massachusetts, the state commissions did not render an opinion until after the company filed with the FCC. "This filing is very much in line with the normal legal process. The record is complete in New Jersey, and that's when we have filed in every other state."
The company notified the board on Sept. 5 that it planned to file with the FCC in 90 days. "We said all along that we planned to file this month," Bone said. "Verizon by law deserves approval, but more importantly, New Jersey consumers deserve the benefits of full competition."
Today's filing demonstrates in great detail that Verizon has met the 14-point competitive checklist with:
- More than 160 agreements allowing competitors to interconnect with Verizon's network to offer alternative telecom services;
- More than 560,000 local phone lines are served by competitors;
- About 100 active competitive local exchange carriers (CLECs);
- Nearly 90 percent of Verizon's residential lines and more than 94 percent of Verizon's business lines can be accessed by competitors through arrangements in which their equipment is collocated in Verizon's switching offices;
- A grade of "A-plus" for on-time performance (95 percent or better) based on BPU approved-measures for providing a variety of services for CLECs, including interconnection trunks, arrangements to physically locate competitors' equipment in Verizon's facilities, leased switched lines, stand-alone lines, changes in customers' lines from one carrier to another, installation appointments for DSL-capable lines, and installation of resale orders.
Other Northeast states have wholesale rates comparable to those in New Jersey before the board slashed them on Nov. 20. "Competition in these other states has grown," said Bone. "The only difference in New Jersey is that the board here has set the retail rate for basic residence service at the lowest level in the nation. That means all carriers make their profits from packaging basic residence service with optional features.
"Even with the lowest basic retail rate in the nation, those who want to compete can," Bone said. "Local competition has blossomed in other Northeast states where Verizon competes with the long-distance companies. The same thing will happen here."
Verizon Long Distance is the fourth-largest long-distance service provider in the country, serving some 7 million customers in 40 states.
To learn more about Verizon Long Distance visit www.verizon.com/njld.
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 128.5 million access line equivalents and 28.7 million wireless customers. Verizon is also the largest directory publisher in the world. A Fortune 10 company with 256,000 employees and approximately $65 billion in annual revenues, 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.
Bob Bishop, 202-515-2516