Conn. Consumer Advocate: PURA Should Not Deregulate Verizon

Verizon faced tough cross-examination Friday as consumer advocates hammered the company’s petition for Connecticut deregulation. Paul Vasington, the carrier's senior director-regulatory and government affairs, said during a Public Utilities Regulatory Authority (PURA) virtual hearing that the market where the ILEC seeks deregulation has reached “full potential” competitively given many VoIP and wireless options. However, officials from the Connecticut Office of Consumer Counsel (OCC) questioned whether Verizon competitors offer services that are the functional equivalent of landlines.

Verizon asked PURA in June to reclassify its remaining services as competitive and retire the company’s alternative form of regulation plan (docket 24-06-15). The carrier argued that it remains subject to strict, outdated rules even though many others offer competitive services in the Greenwich, Connecticut, market (see 2406180045).

PURA should “categorically deny” the petition, OCC Staff Attorney Burt Cohen said as the hearing closed. “The service at stake is only available from Verizon,” the consumer advocate said: "VoIP is not a telecommunications service” and Verizon hasn’t provided enough evidence on competition to warrant upending the company’s regulatory status.

Cohen wondered aloud about Verizon's reasons for seeking reclassification. Is it because PURA recently proposed a nearly $2.5 million fine against Frontier Communications? (see 2407100043) Or is it “the other elephant in the room” that Verizon has announced a deal to acquire Frontier? (see 2409050010). However, Peter Saharko, Verizon senior managing associate general counsel, said the company’s request is unrelated to "the service quality proceeding instituted against any other provider.” Rather, he said, “We’re doing this to try and create a fair marketplace.”

“The emergence of [a] vibrant market has ended any notion that any of Verizon’s services do not face fierce competition,” Vasington said earlier in the meeting. He noted competition against Verizon’s wireline voice service from cable provider Altice’s VoIP service and three wireless carriers: AT&T, T-Mobile and Verizon Wireless. More than 90% of Verizon's former customers have switched to such alternatives, said Vasington: Verizon sees no barriers to entry and “lacks the power to suppress competition.”

“Consumer protections will remain strong and vital” due to competition, stressed Vasington. Also, Verizon lacks current plans to surrender or transfer poles it owns in Connecticut regardless of the proceeding’s outcome, with pole attachment and conduit rates and terms to remain subject to PURA regulation, he said. The company will remain an ILEC and has no plans to change its Lifeline or relay services if it's reclassified, he said. However, reclassification will let Verizon invest more in the market, the official added.

Cohen asked how Verizon can argue that companies like Altice provide effective competition with VoIP while, in other venues, USTelecom, which Verizon is a member of, says that VoIP should not be classified as a telecom service under federal law. "You're arguing that broadband providers are effective telecommunications competition,” said Cohen. "Don't you see the inconsistency here?”

“From the perspective of consumers looking at alternatives for voice service, they don't care about Title I or Title II under federal telecommunications law,” answered Vasington. “They want to know: Can I use a service to make a voice communication?” For consumers, VoIP services like Zoom, Apple FaceTime and Google Meet are ways of doing voice communications regardless of classification, he said.

OCC Research Analyst Rhiana Ash asked if VoIP would be a functional equivalent if a customer seeks a voice service that works without power, which is one attribute of landlines. Yes, said Vasington, because such services generally work on battery-powered devices “and most power outages don’t last that long.” He added, “Consumers have made it clear that a line-powered copper circuit is not a necessity for communications.”

Ash asked if the companies that Verizon calls competitors have lower prices. Vasington said T-Mobile’s $15 monthly wireless service is less expensive than Verizon’s approximately $13 landline service when one includes fees that increase the price to more than $21. Also, Vasington highlighted Ooma as a free voice service that charges only for taxes and the federal USF.

Consumer complaints about copper are "not the driving reason why we do a fiber deployment,” the Verizon official said in response to another of Ash's questions. “We plan a fiber deployment as part of a capital planning process that stretches over years.” When migrating a customer to fiber, Verizon offers a free battery backup. “Some customers take it. Some don’t.”