By Martha McKay, The Record, Hackensack, N.J. Knight Ridder/Tribune Business News
May 26--Verizon wants state regulators to reconsider their decision last month on wholesale phone rates.
In papers filed with the New Jersey Board of Public Utilities late Monday, Verizon said the board's April decision violated federal law and resulted in "unlawful confiscation of Verizon New Jersey's property."
Verizon is angry with the BPU for granting a 14 percent increase on wholesale phone rates that Verizon charges competitors. The company had asked for a 57 percent rate increase, and said jobs and investment were at stake.
The move is the latest in a long-running battle refereed by the BPU that pits former Baby Bell Verizon against rivals such as AT&T and MCI, which lease parts of Verizon's network at government-set prices in order to sell local phone service.
Last week, Verizon said the BPU's decision resulted in the company scaling back a $250 million investment to bring super-high-speed Internet service to 34 Bergen County towns. Instead, Verizon will roll out service in seven communities this year.
In its filing Monday, Verizon criticized the BPU's decision, saying New Jersey's low wholesale rates give rivals a free ride.
"We were not satisfied the first time around and we've been consistently saying that artificially low rates discourage investment and force us to subsidize our competitors," said Verizon spokesman Rich Young.
AT&T scoffed at Verizon's request to reopen the case.
"Verizon continues to poke its finger in the eyes of New Jersey citizens," said AT&T spokesman Ed Bergstraesser. "The company wrangled a 14 percent increase in wholesale rates just last month, and now it seeks to pad its victory with an even higher increase."
As Verizon and its rivals fight on the state level, a wider battle is being waged on the federal level.
In March, a Washington, D.C., Circuit Court of Appeals tossed out rules requiring Baby Bells such as Verizon to lease parts of their network to rivals such as AT&T at a discount. The rules originated in 1996 when a federal law was passed aimed at creating a competitive local phone market.
The court ruling has led the big phone companies -- at the urging of federal regulators -- to sit down and negotiate wholesale rate agreements. Although Verizon and other Baby Bells have reached agreement with a handful of smaller companies, none of the major carriers has made any progress striking deals.
Although it is not yet clear what might happen on the federal level -- the government has until the end of June to decide whether to appeal the case to the U.S. Supreme Court -- Verizon, in its filing with the BPU, argued that state regulators should reconsider how they set wholesale rates in light of the circuit court decision.
A BPU spokesman said the board received Verizon's motion but has not yet set any schedule to review it.
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