Opinion ID: 2193374
Heading Depth: 1
Heading Rank: 1

Heading: A. Regulatory Background

Text: Since 1996, the PSC has approved a series of price cap plans [1] regulating the provision of telecommunications services in the District of Columbia by Verizon or its predecessors. Under the Telecommunications Competition Act of 1996, the PSC is authorized to approve a price cap plan after notice and a public hearing if it finds, inter alia, that [t]he plan is in the public interest, will produce fair, just, and reasonable rates for telecommunications services, and does not unreasonably prejudice or disadvantage any customer class or provider of competitive services. D.C.Code § 34-2002(j)(1), (3), (9) (2001). For pricing purposes, Verizon's services have been grouped in the price cap plans into three categories or baskets: basic, [2] competitive, and discretionary. As the PSC explains in one of the decisions now before us, basic services are telecommunications services that are required to make and receive intrastate telephone calls or which are found to be essential by the Commission. [3] Competitive services are those business services that can be obtained from providers other than Verizon. [4] Discretionary services are a catch-all category, encompassing services that are neither basic nor competitive. While price caps are imposed on basic and discretionary services, no caps are set for competitive services. The premise is that competitive forces in the marketplace will hold down the prices for the latter basket of services. When a service is classified as competitive, the assumption is that market forces will operate to drive rates down, and thereby restrain the incumbent monopoly from engaging in price gouging. Order No. 13149 at 8. Unlike other telecommunications services covered by Verizon's price cap plans, Emergency Number 911 (E911) service has only one customer, the District of Columbia Government. Described by Verizon in its tariff as providing the general public with simple and direct telephone access to the District Government's public safety answering points, E911 service was originally classified in Verizon's price cap plans as a basic service.