The Chesapeake & Potomac Telephone Co. of Maryland yesterday filed a proposal to raise rates for residential and business customers by an average of 25 and 28 percent, respectively.
The proposal, which would produce $123 million in additional revenues for the company, also calls for higher charges for coin phones -- which would rise from 20 to 25 cents -- mobile-telephone service, installation and various functions requiring operator assistance.
The rate request comes on the heels of a Chesapeake & Potomac Telephone Co. request for an additional $75.8 million in the District. Bell Atlantic, the holding company for C&P telephone companies, said Chesapeake & Potomac Telephone Co. of Virginia does not plan to ask for a rate increase this year.
Last week's request in the District would "unbundle" rates by establishing separate charges for access to a dial tone and use of the phone. In Maryland, where those charges were separated in a $168.3 million increase authorized last December, C&P asked yesterday for a monthly increase of $4 to $5 for dial-tone service but no change in usage charges.
Installation charges would rise from $18 to $32 for residential customers and from $27 to $32 for business customers, while telephone ordering charges would rise from $19 to $22 for residential customers, and from $30 to $42 for business customers.
Rates would rise from $27 to $32 per month for each additional business line. Service charges for both residential and business customers would increase by $1 to $23 for the initial 15 minutes for simple jobs.
For complex jobs, the initial fee would not change but additional 15-minute increments would cost $12, up $1.
Customers would pay 45 cents instead of 30 cents to verify a busy signal, but there would still be no charge if line trouble was causing the signal, and $1.20 instead of 80 cents to interrupt a call between two parties.
Rates for access to overseas calling would increase by about 21 percent.
Mobile-telephone service charges for the Washington area would rise from $48 to $70 a month, in Baltimore from $25.50 to $155, and from $42.50 to $140, depending on type of service, and in Havre de Grace from $21.25 to $130.
The Public Service Commission must rule on the matter within six months, a company spokesman said. The company expects the rates to go into effect in January.
If approved, the request would raise the company's rate of return from 11.91 percent to 13.55 percent.
"Although C&P has been successful in controlling expenses and increasing productivity, the company is faced with many challenges which drive up the costs of doing business," said C&P of Maryland Vice President Hank Butta.
"These costs include higher expenses in terms of wages and taxes, higher levels of depreciation expense, higher costs of capital, as well as the loss of some revenues," he said.
Butta also said the company was experiencing losses from "a dramatic increase in competition" that diverts large business customers away from the local network.
The new services allow businesses to bypass the local network.
"Our competitors are already trying to take our most profitable and largest-volume customers. Once these customers leave the local network, they are unlikely to return, and C&P has to make up the lost revenues from its remaining customers," he said.
The company also said it needs "adequate financial resources so as to be able to introduce new technologies, to improve and expand the network, and to maintain service levels throughout Maryland." It is therefore "pricing closer to cost for those services which have traditionally been kept artificially low," he said.
The company is investigating new opportunities in local data or voice network services, primarily for business customers, a spokesman said.
"Trying to fight these guys is like trying to fight an army with a pop gun," said Assistant People's Counsel Fred Hoover. "We feel that the telephone company should have waited at least a year before it came back to the commmission seeking increased telephone rates for the consumer," he said.
"We have never felt that the phone company has reasonably allocated the costs, that they continue to use the basic residential user to subsidize all of these enhanced services," he said. "It's our position that the individuals who will directly benefit from these technologies should be the ones who pay for it."
Hoover also said the company's complaint of competition was a "smokescreen" for higher rates.
"It strikes us as somewhat ironic that the telephone company is crying about competition, and their initial response to competition is to increase all their rates," said. "There seems to be an inconsistency there."
C&P of Maryland, which has 1.58 million residential subscribers and 120,000 business customers, assigns residential customers to one of two rate schedules, depending on their location.
The dial-tone charge for "Group A" residential customers who live in more heavily populated areas like Baltimore and Silver Spring would rise from $5.40 to $9.56.
Customers in those areas who currently pay $16.49 a month for unlimited calling would thus pay $20.65 under the new proposal.
Message rate service, which allows 65 local calls for a flat rate of $9.20 a month, and local measured service, also costing $9.20, would both cost Group A customers $13.36.
Group A customers on economy service now pay $5.40, but would pay $9.56.
Group A business customers on both message and local measured calling rates who now pay $10.70 for a dial tone would pay $14.76.