Verizon Asks Virginia State Corporation Commission to Align Telecom Regulation With Highly Competitive Market

RICHMOND, Va. - Verizon today asked the Virginia State Corporation Commission (SCC) to revise its telecommunications regulations to reflect the state's highly competitive telecom market by reducing regulation of Verizon's retail services.

Such action by the commission would promote competition and innovation by enabling Verizon to increase its ability to respond quickly to consumer demands, offer new services and bundles, provide leading-edge technology and respond to competitors' packaging and pricing.

Verizon's filing, containing 22 volumes of information totaling about 2,400 pages, asks the commission to determine that the company's retail services meet the statutory definition of competitive services and to remove them from pricing regulation. 

Verizon's filing would not change its obligations or the SCC's authority over Verizon's role as a public service company in Virginia.  The commission would continue to enforce service quality rules and maintain its authority to resolve consumer complaints as it does today.   Verizon would continue to provide E-911 and Lifeline products under regulated prices and terms.

"The convergence of various technologies has dramatically and irreversibly changed Virginia's telecommunications market, as consumers and businesses today can and do choose from among numerous landline, wireless, broadband, cable and Internet-based providers," said Robert W. Woltz Jr., president of Verizon Virginia.  "Yet only landline companies like Verizon are regulated by the SCC."

The Virginia General Assembly in 1995 enacted a law that opened the local telephone market to competition.  The General Assembly gave the SCC authority to manage the local phone market's transition to competition, and part of that process is to determine when services have become competitive.  Specifically, the law defined the standard for that determination by noting, "Competition or the potential for competition is or can be an effective regulator of price."

Woltz said, "Since 1995, the General Assembly has continued to provide policy guidance as competition and convergence have accelerated.  The General Assembly has made it clear in enacting the local competition policy act in 2004 and the cable-choice and communications-tax laws last year that regulations and tax policies should not disadvantage technologies or competitors in this convergent marketplace.

"The SCC has done a good job in managing the 10-year transition from a monopoly to a competitive market.  It's time now for the commission to declare the process complete and put Verizon on a more equal footing with its unregulated competitors."

Plentiful and Growing Competition in Virginia

In its filing, Verizon provides evidence that competition from a number of technologies and providers is plentiful and growing throughout Virginia.  At least 50 unique competitors currently provide service to consumers and small businesses, including 24 competing landline companies, 14 cable companies, nine wireless providers, numerous broadband providers and voice-over-Internet providers.  With these competitors in the market, 99 percent of households in Verizon's Virginia service area can purchase service from at least two providers in addition to Verizon; 92 percent can purchase service from at least five providers, and 73 percent can purchase services from eight or more providers.

While the demand for communications services in Virginia continues to grow, the number of landlines provided by Verizon and other incumbent local phone companies continues to decline.  In 1999, for example, incumbent companies' landlines in Virginia accounted for about 66 percent of the total number of end-user customer connections from landline, wireless, cable, broadband and Internet-based providers.  By the end of 2005, that percentage shrank to about 33 percent.  In fact, Virginia has more than 5 million wireless subscribers – a figure that exceeds the total number of landlines throughout the state.

In addition to its statewide analysis, the filing also provides a detailed examination of competition in 16 different regions served by Verizon, ranging from the more densely populated areas like Hampton Roads, Northern Virginia, Richmond and Roanoke to more rural regions like the Eastern Shore, Northern Neck, Southside and Southwest Virginia. 

Competition or the potential for competition is present throughout the state, and competitors continue to enter markets across Verizon's Virginia service area using landline, wireless, broadband, Internet and cable phone technologies.

Recognizing that while competition exists in all regions of Virginia, it is still maturing in some areas, Verizon's filing proposes to limit to no more than $1 per year for three years any price increases to the monthly charge for residential dial tone with unlimited local calling.  That limit, coupled with existing competitive pressure on prices, will provide reassurance that price deregulation will not have an adverse effect on consumers, no matter where they live.

Verizon's filing does not seek to change the company's responsibility as the carrier of last resort for local phone service, and Verizon will continue to offer Lifeline services to low-income Virginians.  The filing does not change E911 services or any business relationships Verizon has with competitors. 

The company expects the commission to set a schedule in the next few weeks to review the case.

Verizon Communications Inc. (NYSE:VZ), a New York-based Dow 30 company, is a leader in delivering broadband and other wireline and wireless communication innovations to mass market, business, government and wholesale customers.  Verizon Wireless operates America's most reliable wireless network, serving nearly 57 million customers nationwide.  Verizon's Wireline operations include Verizon Business, which operates one of the most expansive wholly-owned global IP networks, and Verizon Telecom, which is deploying the nation's most advanced fiber-optic network to deliver the benefits of converged communications, information and entertainment services to customers.  For more information, visit www.verizon.com.

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