The Chesapeake and Potomac Telephone Co. has reduced its rate increase request for the District of Columbia from $49.9 million to $47.7 million, but shifted the burden of the new rates squarely on the shoulders of residential users.
C&P, as part of its overall rate request to the D.C. Public Service Commission, supported the concept of a "lifeline" service aimed at helping the elderly, disadvantaged and disabled afford telephone service once the new rates go into effect.
The lifeline proposal would charge customers about $4 a month and include 30 local telephone calls. The plan was criticized yesterday by consumer groups who said the application form proposed by C&P to determine who would qualify for the service would discourage the elderly and other needy people from applying for the assistance because it would be demeaning.
The D.C. Office of the People's Counsel, which opposes any increase in C&P rates, had no immediate comment on the new rate increase proposal. Officials at the counsel, which represents the public interest before the PSC, said they had not had a chance to study the latest rate proposal.
The new filing adjusts the total the company is seeking down to $47.7 million, to go into effect in 1985, with an additional $6.8 million in 1986. C&P has adjusted its rates twice before, each time claiming new figures not previously available have allowed it to make changes.
The company originally filed a rate request of $75.8 million in August but adjusted the figure downward, first to $67.8 million and then to $56.7 million. The figures take into account a $6.8 million increase that would go into effect in 1986.
The original rate request would have raised residential rates an average of 153 percent and business rates an average of 12.4 percent in the District.
The new C&P rate plan still would split residential phone bills into a $13.42 charge solely for hearing a dial tone and additional charges for actual usage, but the company proposed a whole new rate structure for all classes of service.
C&P wants residential customers to absorb about $42.5 million of the $47.7 million increase it is seeking. Rates for business customers would be about $2 million of the proposed increase, but rates for Centrex or private network services would decrease, while the rates for government customers would increase about $1.7 million.
The cost of the District's unlimited calling plan would rise from a total of $12.49 a month to a basic charge of $13.42 a month for the dial tone and an additional $10.12 a month for usage -- a total of $23.54. C&P's economy service, which now costs $3.11 plus 6.9 cents per call, would rise under the new plan to $8.42 a month for the dial tone and an additional 12.37 cents per call.
"Basically, over the years residential customers have been subsidized by the business customer -- the burden falls on the residential subscribers because over the years they have not been paying what the service costs," said C&P spokesman Web Chamberlin.
Consumer groups immediately said they did not see why residential customers should be burdened with an increase meant to keep business services competitive.
"They argue they need the revenue to stay competitive, but it is not clear there is any justification for placing the disproportionate burden on residential customers," said Gene Kimmelman, legislative director of the Consumer Federation of America. "It's hard to take seriously their justification when they keep altering their rate requests on a monthly basis."
In the $4-a-month lifeline proposal, C&P, which maintains it actually costs $13.42 a month just to provide dial tone, would take the difference between what it charges for the service and the "actual" cost and take a deduction off of gross receipts tax.
The lifeline plan came under attack from the D.C. People's Counsel. "We are opposed to the proposal because it is just a ruse," said a spokesman for the People's Counsel. "They don't need that rate increase to start with. They are proposing a lifeline that will cost $4 and will have a means test attached to it. Right now anyone can get economy service for $3.11" without a qualification test."