Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, December 18, 1993 TAG: 9312180185
SECTION: VIRGINIA PAGE: B2 EDITION: NEW RIVER VALLEY
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
The plan removes regulation of rates and earnings for telephone services facing market competition, but maintains limits on monopoly services.
But the SCC also made significant changes in the plan by tightening limits on monopoly profits while allowing more flexibility in setting prices for some services.
The changes include diverting 25 percent of profits from Yellow Pages advertising to support the cost of basic telephone service and lowering the level of earnings companies may reap from monopoly services.
Those changes did not sit well with Chesapeake & Potomac Telephone Co. of Virginia.
"We are extremely disappointed with the commission's decision," said Hugh Stallard, C&P's president and chief executive officer.
Stallard portrayed the SCC's decision as a retreat from Virginia's position as a leader in advocating more regulatory freedom for the telephone industry as competition emerges in the communication business.
"Although the commission finds that the experimental plan has been successful, it goes on to modify it in ways which will remove the positive incentives which created the success," he said.
Other participants in the experimental plan are GTE Virginia, GTE South, Sprint/Centel-Virginia and United Telephone Southeast.
The decision met with a mixed response from Attorney General Stephen Rosenthal, whose office long has opposed the plan.
"While rates will go down under this order, consumers will still be paying more than they should, given current market conditions," Rosenthal said.
The order prevented the experimental plan from expiring at the end of the year, but the SCC backed away from its intention of making a modified version of the plan permanent Jan. 1.
The turnaround resulted from a last-minute legal maneuver by Virginia's cable television industry, which challenged the SCC's authority to adopt the plan as an alternative regulation without a separate public hearing.
The SCC said it will conduct a hearing in April that will include the cable TV industry.
The Virginia Cable Television Association and its four biggest members said they will take the opportunity to present their own proposal.
"It seems to ensure them a seat at the table," said James Roberts, the cable industry's lawyer.
However, the new proceeding also allows C&P to resubmit a proposal to abandon traditional regulation of rates and earnings entirely in exchange for a system of temporary price caps.
by CNB