RICHMOND — The State Corporation Commission (SCC) has accepted an agreement between SCC staff and Verizon to extend for two more years the period in which price increases for basic local residential telephone service are limited to one dollar ($1) per year. Both Verizon, Virginia’s largest provider of local telephone service, and the staff of the SCC agreed that the price cap period be extended.

The five-year period has been in place since January 1, 2008 and would have expired on December 31, 2012. For residential service, the safeguard will continue until January 1, 2015.

Basic local exchange telephone service (referred to as “BLETS”) is limited to basic dial-tone service and does not include such features as call waiting, voicemail, and caller ID. Approximately one-third of Verizon’s customers still receive basic service. The majority of Verizon’s customers are on plans that “bundle” a number of services. The price cap provision does not apply to such plans.

For business service, the price increase limit has been three dollars ($3) per year, per line. That price limit is not being extended and will expire on December 31, 2012.

Pursuant to state law, basic residential and business service in all Verizon exchanges throughout Virginia are deemed to be competitive. In its final order, the SCC said, this statutory provision “…does not change the Commission’s duty and authority…to monitor the competitiveness of telephone service in the Commonwealth.” Such monitoring by SCC staff may involve, after notice and an opportunity for hearing, a Commission review of whether competition effectively regulates prices.

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Case Number PUC-2012-00008 – Order on Verizon price safeguard extension