TRENTON — Rates for basic landline telephone service would probably go up if a bill moving rapidly through the Legislature becomes law, according to a report released today by two interest groups. The report, by the left-leaning New Jersey Policy Perspective and New York-based Demos, cites a 2009 survey by the National Association of State Utility Consumer Advocates that...
TRENTON — Rates for basic landline telephone service would probably go up if a bill moving rapidly through the Legislature becomes law, according to a report released today by two interest groups.
The report, by the left-leaning New Jersey Policy Perspective and New York-based Demos, cites a 2009 survey by the National Association of State Utility Consumer Advocates that found rates rose in 17 of 20 states that deregulated the service. The increases ranged from 8 percent to 100 percent.
"Should the Legislature adopt legislation which has the almost overwhelmingly likely consequence of raising telephone rates for no good reason?" said Richard Brodsky, a former New York State assemblyman and one of the report’s authors. "This will affect rural areas, senior citizens and cities most particularly because that’s where the bulk of the people are still dependent on the old copper-wire system live."
The report also said deregulated landlines would turn Verizon’s assets into a "cash cow" that it could sell off without regulatory oversight.
But the president of Verizon New Jersey, Dennis Bone, said rates have already gone up with regulations in place, adding he felt the report is "just filled with lies, false assumptions and fiction."
Brodsky strongly disagreed with Bone’s characterization today. He challenged the Verizon executive to identify any, and offered to meet with him. "We believe that (the bill) will substantially raise rates for New Jerseyans; you do not," he said. "Perhaps we would all be better off if the reasons for our positions were made clear, and we avoided character attacks."
The report comes as supporters and opponents of the bill (S2664) have begun a lobbying push in advance of its expected final vote by the Senate later this month. Supporters of the bill say it removes outdated rules.
"The regulations over us were put on the books back when Model Ts were traveling up and down Broad Street," Bone said.
But opponents, including state Ratepayer Counsel director Stefanie Brand, say the proposed legislation will hurt consumers.
"If this bill goes into effect, prices for things that are not already competitive are going to go up and we’re going to lose significant consumer protection," Brand said.
The bill, which is sponsored by top Democrats and Republicans, overwhelmingly passed the Assembly last month and awaits a vote in the Senate before it can reach the governor’s desk.
Consumer protection
The state Board of Public Utilities regulates the most basic telephone service. The current rate is $16.45 before taxes and fees.
Bone said the Board of Public Utilities has increased landline rates 84 percent over the last three years. "We’ve already experienced that increase and nobody said boo about it," he said, adding that Verizon had no plans to increase rates in the near future or sell its New Jersey infrastructure.
The president of New Jersey Policy Perspective, Deborah Howlett, said that while rates have indeed gone up, "there are still protections for consumers" under the current rules.
Under the bill, phone companies would still have to provide deeply discounted service to low-income elderly residents under the state’s Lifeline program.
Regulations would only be lifted in competitive markets, although the bill considers mobile phone networks, which cover virtually the entire state, competition.
"Alternatives such as wireless and (Voice over Internet Protocol) are too expensive to provide real price competition," the report said.
Staff writer Megan DeMarco contributed to this report.