- The Washington Times - Wednesday, January 17, 2007

RICHMOND (AP) — Verizon Communications Inc., Virginia’s largest provider of local telephone service, asked state regulators yesterday to allow the company to remove pricing restrictions because the market is becoming more competitive.

In filings with the State Corporation Commission (SCC), Verizon Virginia and Verizon South said regulation is not needed amid changing technologies and increased options for wireless, Internet and cable phone services.

“The market we live in now is a competitive, dynamic, technology-driven, ever-changing marketplace. Regulation wasn’t designed to manage it,” said Robert W. Woltz Jr., president of Verizon Virginia.

Regulatory-free competition would ensure “reasonably adequate service at just and reasonable rates,” Mr. Woltz said. The change also would help create new services, he said.

If the SCC approves, Verizon would be allowed to change rates without approval from the commission, but the commission still would regulate the quality of service.

Hearings will be held before the commission votes, SCC spokesman Ken Schrad said.

Under the proposed plan, Verizon would limit the increase on monthly bills to no more than $1 per year for residential basic phone service for three years and remove price floors currently in place under its alternative regulatory plan with the commission.

In January 2005, the commission approved the alternative regulatory plan for Verizon to raise its rates by up to 10 percent a year — the first residential rate increase since 1994. The plan permitted the company to raise rates annually until it caught up with inflation, with a ceiling rate for basic phone service.

Telecommunications companies are making requests for deregulation more regularly because of the “realities of the marketplace” and to have more competitive pricing, industry analyst Jeff Kagan said.

“The competitive playing field is going to be changing dramatically over the next few years,” Mr. Kagan said. “We’ve been watching new competitors move in for the last 10 years, and they’re increasing.”

He also said consumers, who are moving away from traditional telephone services, should be aware of the changes.

Statewide, 92 percent of consumers have five or more options for service other than carriers such as Verizon, the company said. Verizon said in its filing that at least 50 competitors currently provide service, including telephone, cable, cellular and broadband companies.

The company also analyzed data from the Federal Communications Commission showing the drop in wired access lines provided by Virginia’s incumbent carriers, who have been providing service since the Telecommunications Act of 1996.

Those numbers show access lines have fallen from 4.85 million in 1999 to 3.8 million in 2005.

Meanwhile, the number of connections that also includes cellular, broadband and companies like Cavalier Telephone LLC, grew from 7.3 million in 1999 to 11.4 million in 2005.

Verizon has been granted deregulation for local telephone service in other states, including California and New York.

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