THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Tuesday, June 18, 1996 TAG: 9606180416
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 59 lines
A State Corporation Commission hearing examiner on Monday denied GTE Corp.'s request to throw out a commission staff report recommending the phone company's rates be slashed 16 percent.
The action by examiner Glenn Richardson came on the first day of an expected two weeks of testimony in the rate case of GTE, the state's second-largest phone company.
GTE argued in its motion that its filing for major changes in the way it structures local telephone rates and calling areas will be ``revenue neutral,'' meaning no net increase in average customer rates.
But Richardson said GTE's contention remains to be proved, and that the commission staff's evidence indicating otherwise must be heard. The staff report recommends slashing GTE's rates by $41.6 million a year.
GTE proposed last June to make sweeping changes in rates and calling territories for its 430,000 Virginia customers, including about 70,000 in greater Hampton Roads. Under its initial plan, most of its customers would get wider local calling territories, but their basic monthly rates would rise - in some cases by as much as 200 percent.
In the face of more than 21,000 letters from customers commenting on the plan, 98 percent negatively, GTE moderated its planned rate increases. It also withdrew a request to increase pay-phone charges from 25 cents to 35 cents.
GTE estimated with the latest planned changes it would collect $1 million less a year - even with the planned increases in basic monthly rates - because as local calling territories are widened, it won't collect nearly as much in long-distance charges.
But last month, the commission staff said GTE's math is all wrong - and that the company's profit margin would actually rise. Based on that, it initially recommended a $43.8 million cut in annual revenues for the company. It has since revised the recommended cut to $41.6 million.
The final decision rests with the three members of the commission, who will get a recommendation from Richardson sometime later this year.
GTE's setback with the hearing examiner is not its only problem in Virginia.
The union representing about 500 employees of the company last week began running radio advertisements that are highly critical of GTE's treatment of workers and customers.
Employees represented by the Communications Workers of America in about 20 cities and counties in the state, including South Hampton Roads, have been working under an extension of their previous three-year contract since it expired in late February.
The company has demanded some wage and benefit concessions from the union, said Bill Evitt, CWA Local 2275's bargaining committee chairman. He said union leaders have refused, and that little progress has been made in negotiations for a new contract.
The ad effort was begun in hopes of bringing public pressure on the company to change its position, Evitt said.
Lacy Yeatts, a GTE spokeswoman, called the union's ads a ``posturing effort'' and said the union's ad claims that GTE's service levels have declined are ``simply not true.'' The corporation commission's own statistics on GTE show its service quality has improved in the past few years, she noted. by CNB