THE PHONE company has just reached out and touched everyone in the city with an unusual agreement--to raise the cost of almost all local services by nearly 20 percent a month. Still, however hefty this signed-and-nearly-sealed settlement may seem at first glance, there's much to be said for it.
To begin with, D.C. People's Counsel Brian Lederer --hardly the darling of Washington's utilities--not only is pleased with the agreement, but also believes it contains several important protections that are in the public interest. Besides clipping C&P's original request for a $123-million increase by more than two- thirds, the settlement separates the phone company's immediate rate request from the larger, more profound long-distance-to-local shifting and restructuring of telephone service, charges and technology sought by C&P and its parent, AT&T.
Had C&P's initial restructuring-and-rate-increase proposal gone into effect, Mr. Lederer says, telephone bills in the city could have gone up to five times what they are today. Rates under that schedule would have included sharp increases in charges for installation as well as for operator assistance--or what we used to consider "service." Also, the proposal would have imposed a fee for operator verification--finding out for you whether that interminably busy line is really working. 2 There was more that didn't fly on this round: C&P also had sought to change the way the cost of a local call is calculated--to base the rate on the length of the call, the distance it must travel over phone lines and the time of day it is made.
If the percentage of the increase seems steep, it is the first rise in residential user rates since 1976. And if this unusual settlement wins approval by the Public Service Commission--expected in a matter of weeks --all sides will have been spared the traditional prolonged litigation that Mr. Lederer notes is neither in the public's nor the city's interest. Nor, as phone company officials were quick to note, would it have been in their interest because "if we had waited for the hearing process and then didn't get what we wanted-- and traditionally we don't usually get what we ask for --we would have just lost money." That translated, of course, is not money "lost," but money to be coughed up by consumers sooner or later.
So, the settlement does eliminate much uncertainty for consumers--while leaving for the next round of negotiations precisely how the latest rate increase may be redistributed to reflect any restructuring allowed by the Public Service Commission. At least for now, that is best put on hold.