Opinion ID: 2193374
Heading Depth: 1
Heading Rank: 2

Heading: The 2002 Price Cap Plan

Text: On August 16, 2001, Verizon and the Office of People's Counsel (OPC) [5] petitioned the PSC to approve a settlement agreement relating to Verizon's proposed 2002 Price Cap Plan. Intended to replace a price cap plan that was due to expire at the end of the year, the proposed plan included three changes relevant to the present proceeding. [6] First, the plan limited annual rate increases for basic and discretionary services to 10% and 15%, respectively. Second, the plan reclassified E911 service from a basic to a competitive service, meaning that the service would no longer be subject to a price cap (or to any limits on rate increases). [7] Third, the plan provided that the parties would be allowed to return to the PSC to request the reclassification of any existing service from one basket to another. After giving notice in the District of Columbia Register and requesting comments on the proposed plan, [8] the PSC held a public hearing on January 17, 2002. Although the District Government had been a party to the proceedings on Verizon's earlier price cap plans, it did not participate at the hearing on the 2002 plan, and it did not object to the proposed reclassification of E911 service or any other aspect of the plan. [9] During the public hearing, the PSC questioned the Verizon and OPC representatives about the E911 service. Both parties reiterated their support for moving that service from the basic basket to the competitive basket. Their rationale for the reclassification was twofold. First, Verizon anticipated competition from other telecommunications carriers, to whom Verizon was legally obligated to make available the E911 service components. Verizon's president testified that she was well aware of one competitor in particular who is extremely interested in providing that service for the District Government, [10] and that there were certainly other companies capable of providing the service. The OPC representative agreed that E911 service was fully competitive. Second, Verizon expected competition from the District Government itself, which had announced plans to displace Verizon by using its own data network (DC-Net) and equipment to provide E911 services. On February 28, 2002, the PSC approved the proposed 2002 Price Cap Plan with only slight modifications. The PSC determined, inter alia, that the Plan would produce rates that are fair, just, reasonable, and nondiscriminatory and would not unreasonably prejudice or disadvantage any customer class or provider of competitive services. Order No. 12338 at 14, 15. As neither the District Government nor any other affected entity filed a timely request for reconsideration, the approval of the 2002 Price Cap Plan became final on April 1, 2002. [11]