DATE: Saturday, March 15, 1997              TAG: 9703150657

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY DAVE MAYFIELD, STAFF WRITER 

                                            LENGTH:   49 lines

EXAMINER URGES CUT IN GTE RATES

A State Corporation Commission hearing examiner has recommended that GTE Corp.'s rates be cut by $27 million a year, with about $19 million of the savings going to long-distance carriers through fee cuts.

Examiner Glenn P. Richardson made the proposal, capping his role in a divisive two-year-old case involving the state's second-largest local phone company.

The three-member commission now must make a decision. The commission gave no indication Friday how or when it will decide. Generally, it follows hearing examiners' recommendations.

GTE, which has about 450,000 customers in Virginia, including 70,000 in Hampton Roads and western Tidewater, first proposed a major restructuring of its rates and calling plans in 1995. The company initially proposed, in return for broadening its customers' local calling areas, an increase of as much as 200 percent in basic monthly phone rates. It contended that its proposal was ``revenue neutral'' - that what it would gain in basic monthly fees, it would give up in fees for long-distance calls.

But after protests, GTE scaled back its proposed increases in monthly rates, saying its revised proposal would cut its annual revenues in Virginia by $1 million. Last May, the commission staff recommended slashing GTE's revenues further - by about $42 million a year.

If the commission adopts Richardson's recommendation, most of his proposed $27 million in total rate cuts would go to long-distance carriers, through lower fees to use GTE's network. Another $8 million in savings would go directly to consumers through a roughly 20 percent cut in rates GTE charges for long-distance calls within the 757 area code.

In what would essentially be a wash for most customers, he recommended a $2-a-month increase in basic monthly fees for customers in southeastern Virginia and elimination of a $2-a-month charge for TouchTone service.

In addition, Richardson called upon GTE to offer consumers five choices of local calling areas - the wider the area, the bigger the monthly charge. He said customers should have the option of keeping their current limited calling area.

GTE said it strongly disagreed with the recommendations, and contended that its current basic rates don't even cover its costs. ILLUSTRATION: RATE CUTS

The recommendation: Cut GTE Corp.'s rates by $27 million and give

most of that to long-distance carriers who use GTE's network.

Customers might see a decrease of possibly 20 percent in rates GTE

charges for long-distance calls within the 757 area code.

Send Suggestions or Comments to webmaster@scholar.lib.vt.edu