The C&P Telephone Co. filed for a rate increase today that would nearly double the price that Maryland residential customers now pay for unlimited local telephone service.
The record request to the Maryland Public Service Commission would produce $218 million in additional annual revenue and push the monthly rate for many users to $21.30 for a single home telephone line. Monthly line charges now range from $11.82 to $14.39 for Maryland residents in the Washington metropolitan area. Equipment charges are extra.
In addition, the company seeks to initiate a controversial local measured service option (LMS) in which charges would be based on the number and length of local calls.
The Maryland request is the latest in a series by Bell subsidiaries around the nation who contend they must raise local rates because of competition, technology and government-mandated changes in the telephone industry. Similar requests have been filed in Pennsylvania, Delaware and the District of Columbia. The proposal filed March 15 in the District, seeking an $82 million increase, would more than triple the rates for many local residential telephone users.
None of the increases can take effect in D.C. or Maryland without approval by local regulators, who aren't expected to make a decision for months. The requests already are being challenged in both jurisdictions by the offices of the People's Counsel, which represents consumers in cases before the PSC.
"We are going to put on a full case," said James H. DeGraffenreidt, assistant people's counsel in Maryland. "We want to evaluate their request for $218 million to see if their methodology is sound."
In the last rate case filed by the Maryland C&P, in July 1982, the company asked for $165 million in additional revenues. The company later pared its request to $125 million, and ended up getting $44.2 million. The PSC granted raises totaling $28.2 million in February and the company got an additional $16 million by going to court.
"We never get everything we ask for," said Lynne C. Troup, a public relations representative for the company.
In today's filing, C&P asked that its allowed rate of return be raised from 11.7 percent to 13.28 percent. Troup said the company earned 10.28 percent for the 12 months that ended in March. Revenues for the Maryland C&P totaled $835 million for 1982, she said.
C&P projects that reorganization of the company because of divestiture and other government-ordered changes, including the loss of revenue from long-distance and telephone equipment, would reduce its revenues for 1984 to $588 million with existing rates. Troup said the company will need $806 million in 1984 revenues to cover costs and to earn what it believes is a fair rate of return.
That is a difference of $218 million--the amount of the increase that the company is requesting.
C&P hopes to raise about one-fourth of that by increasing prices paid by long-distance carriers, such as MCI, Sprint and AT&T. The rest would come from higher local service fees paid by residential and business customers.
Besides higher monthly rates, C&P proposed these major rate changes:
* Installation charges would more than double, with the minimum price for installing one home telephone line jumping from $24.53 to a minimum of $53.
* Operator-assistance charges would be added to toll calls within Maryland on credit card calls, station-to-station calls, collect calls and calls billed to a third party, and person-to-person calls. For example, the price for a five-minute daytime operator-assisted call from Gaithersburg to Oxon Hill that now costs $1.76 would go to $2.75.
* Special telephone service prices would increase, with call forwarding climbing from $1.84 a month to $3.50; call waiting from $3.36 a month to $3.50, and three-way call services from $2.58 to $3.50.
The company also proposed some adjustments that would result in lower costs for customers. The price for speed-call service, with eight numbers coded into the telephone, would decrease from $1.84 a month to $1.50.
Some intrastate toll fees also would go down, so long as they don't involve operator assistance. The charge for a direct-dial, five-minute daytime call from Gaithersburg to Oxon Hill, for example, would be cut from $1.55 to $1.20.
J.H. Butta, vice president of Maryland C&P, said many customers could reduce their monthly telephone bills by moving from unlimited service--"The Cadillac of telephone service," he said--to the LMS, so long as they budget their telephone calling.
" . . . there is the opportunity for customers to reduce telephone costs and exert individual control over this part of the family budget," Butta said.
About 85 percent of Maryland home phone users currently have unlimited local calling.
The reduction would occur if the customer chose the LMS plan, which has a proposed rate of $9.70 a month for a home telephone line, compared to the proposed unlimited calling rate of $21.30 a month. Both prices are for metropolitan-area users with basic dial service; equipment and Touch-Tone service are extra.
Butta acknowledged that the proposed changes could lead to higher prices for many customers, depending on how they used their telephones. A customer switching to the $9.70 LMS rate could wipe out any savings by talking too long or making too many calls. After using up a $5.85 call allowance each month, a LMS customer would pay for each outgoing telephone call at a rate of 4 cents for the first minute and 1.5 cents for each additional minute.
Customers generally "will be upset by this--no doubt about it," Butta said.