Chesapeake & Potomac Telephone Co. plans to file within the next 10 days for a rate increase that could nearly double the monthly local bills of District of Columbia residential customers and raise the price of pay phone calls by a nickel or dime, to as much as 25 cents a call.
Delano E. Lewis, the new vice president and general manager of the Washington C&P Co., said the basic service rate "could double. . . . It could conceivably be $10 to $15" monthly as a result of the rate case that C&P now is preparing.
In a 90-minute press briefing yesterday, Lewis said the company also is considering proposing a subsidized rate for the "truly needy." But he said C&P has not yet determined who might fall into that category, or how the company might administer the program.
Lewis said the basic, or flat rate increase will be sought primarily to help make up for long-distance revenue that C&P will lose as a result of the government-ordered reorganization of the telephone industry.
Those long-distance revenues, which have been used to subsidize local-service costs, will be cut by 30 percent to 40 percent when the reorganization is complete by the end of this year, he said.
At the same time, one effect of sharply higher basic rates will be to make measured local service more attractive to local customers, Lewis said.
C&P has een pushing hard to institute measured local service here. Last month the company launched a campaign aimed at gaining public support for a proposal called Optional Measured Service (OMS), which would compute a customer's monthly telephone bill according to the number of local calls made, the length of time talked, the time of day the call is placed and the distance involved.
"The company feels those who phone less should pay less," Lewis said.
At present, the basic rate for unlimited local calling for a D.C. resident is $8.83 a month, plus equipment lease fees and taxes.
The flat rate for suburban Maryland residents is $12.95 per month, and for Virginia residents it is $12.78.
Lewis said C&P has been conducting cost-analysis studies for the past six months to pin down the actual cost of providing telephone service to customers. Once the service cost has been established, the company can propose a rate that more accurately reflects that cost, Lewis said.
Any new rates would have to be approved by the D.C. Public Service Commission before they could be put into effect.
In addition to a raise in basic rate, C&P will ask the public service commission approve OMS as a rate option for customers and to allow as-yet-unspecified increases in prices for the other economy rates now available in the city, Lewis said.
Those rates currently include an economy service for $2.20 a month plus 4.9 cents for each local call, or unlimited calling within the District for $4.51 a month plus 4.9 cents for each local call to Maryland or Virginia.
An area measured service rate provides 60 calls within the metropolitan area and costs $4.51 a month plus 4.9 cents for each local call after the first 60.
None of the monthly prices cited here includes the cost of leasing the telephone equipment, which varies according to the number of telephones leased and the type of equipment.
C&P has been running advertisements telling how much money some customers could save over existing flat rates if they had the choice of subscribing to OMS. The savings cited in the advertisements amount to as much as $50 a year.
But critics of OMS complain that it will lead to higher monthly bills for some customers, that it will be like 'having a pay telephone in your living room,' and that it will be difficult for customers to monitor the accuracy of the costs for which they are billed by the C&P computers.
Studies show that the average flat rate usage is 158 calls a month. But two-thirds of local flat rate users make fewer calls than that--suggesting that they pay too much for phone service, Lewis said.
Some other flat-rate customers make more than 1,000 calls a month, indicating that they aren't paying enough, he said.
Lewis said the OMS proposal to be included in the C&P petition would provide a price break for customers who use their telephones only occasionally. Critics of the proposal have said that the existing economy rates already provide relief for those users.
On the question of a special rate for the "truly needy," Lewis said a random sample of 300 customers showed that they favored the idea of a lower rate for the needy by a ratio of 8 to 1.
Two-fifths of those interviewed said they would be willing to pay $1 extra on their telephone bill to make a lower rate affordable for the truly needy, Lewis said. The other three-fifths said they would be willing to pay 25 cents extra, he said.