The Chesapeake and Potomac Telephone Co., unhappy about the size of its $28.2 million rate increase, has asked the Maryland Public Service Commission to reconsider its decision and award the company more money.
In a petition asking for a review of the case, C&P threatened to carry its appeal to higher authorities unless the PSC yields. That appeal could go to court or to an administrative hearing of the Federal Communications Commission.
"The PSC rate increase order totally ignores federally mandated regulations that all telephone companies institute new capital recovery methods," C&P said in its letter.
Commission chairman Frank O. Heintz said that no decision would be made on the C&P request for two weeks. He said that although there have been reconsiderations of the commission rulings in the past, adjustments are rarely made.
The increase approved Feb. 22 by the Maryland PSC was only about one-fifth of the amount requested by C&P when it filed for a rate rise last September. The company, which provides telephone service for 1.9 million Maryland residential and business customers, asked for $125.4 million, which would have resulted in an across-the-board increase of about 19 percent for customer products and services. Instead, C&P was awarded the $28.2 million increase, which amounts to a hike of about 2 3/4 percent.
In its written order, the commission said that the C&P requests were "unjust and unreasonable." The order also took note of "the depressed condition of the state's economy" and said that some of the proposed accounting methods would burden the C&P customers while benefiting the telephone company.
Here is a summary of the rate increases, which took effect retroactive to Feb. 19:
* Monthly residential and business telephone rates rose about 4 percent, although the effect on individual bills will vary. For private unlimited service for residence customers in Rockville and Silver Spring, for instance, basic monthly service now is $9.95, up 35 cents from before. Customers in those two rate zones with 65-call message rate service now pay $9.97, up 27 cents a month. Economy service in those zones is $5.34, up 14 cents a month.
* Pay telephone calls increased 20 cents, up a nickel from the previous rate of 15 cents, as soon as C&P can convert its equipment.
* Rates for all long-distance calls within Maryland climbed 2.75 percent.
* New charges took effect for local operators verifying that a line is in working order. If the line is out of order, there is no charge. But if it is working, the charge for verification is 30 cents. If someone is on the line, the charge is 80 cents to verify and interrupt.
* Service charges for processing a service order and connecting a line increased 2 3/4 percent.
* Monthly rental fees for equipment leased from C&P, including standard, Princess and Trimline, and Touch-Tone increased 2 3/4 percent.
* Charges for checks that must be returned for nonpayment rose to $7, up from $6.
In making its decision, the Maryland PSC generally rejected the accounting changes that C&P had sought. The company had asked to have customers pay at a faster rate the cost of replacing equipment they already use. The faster repayments --known as depreciation--would have raised customers' bills and reduced the amount that the American Telephone and Telegraph Co. would have paid to C&P for equipment.
That one change represented nearly $16 million in the total C&P request for $125.4 million.