SNET Seeks Rate Change For Residential Phones

NEW BRITAIN (AP) — Southern New England Telecommunications has asked state regulators to approve rate changes that would tie residential phone rates to the inflation rate.

Rates would be adjusted annually, according to the 57-page document filed Monday with the state’s Department of Public Utility Control.

Residential rates would initially increase by between 33 and 44 cents per month under the formula SNET is requesting in its filing, said John Emra, an SNET spokesman.

Mr Emra said the company’s request will gradually allow residential rates to rise to the point where other phone companies will be willing to compete for residential customers.

“The reason there is almost no competition for customers in the residential market is because the [profit] margins are not attractive enough,” Mr Emra said.

The size of the increase would depend upon which of the five rate classes a customer is in, Mr Emra said. The most expensive rate classes which would see the largest monthly increase under SNET’s proposal are in the state’s more heavily populated regions, which have large local calling areas, he said.

Connecticut Attorney General Richard Blumenthal said SNET’s plan “offers nothing for consumers.”

“I warned at the time of the SNET-SBC merger that if the company’s cost savings were not ordered to be shared up front, that customers would not see their fair share of the savings,” Mr Blumenthal said of SNET’s 1998 merger with Texas-based SBC Communications. “Judging from this filing today, SNET is trying to make that prediction come true.”

Mr Emra said Mr Blumenthal “is mistaken” when he claims that Connecticut consumers have not benefited from the merger.

“SNET and SBC are investing over $1 billion this year and next in its network here in Connecticut,” Mr Emra said, adding the investment will bring better service and new products.

The DPUC isn’t expected to rule on SNET’s request until February at the earliest, but if it approves the proposal, no rate adjustments would begin until June.

Even if the DPUC rejects SNET’s request, residential service competition in Connecticut is likely to heat up soon, said Jeff Kagan, an Atlanta-based industry analyst.

“If we go a few years out, I believe local markets are going to be as competitive as long distance,” Mr Kagan said. “The long distance market is just a lot more mature right now and the mechanisms for competition are already in place.”