Office of the Ohio Consumers' Counsel

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Consumers’ Counsel asks Supreme Court of Ohio to overturn decision allowing Cincinnati Bell rate increases

COLUMBUS, Ohio – March 30, 2007 – A decision allowing Cincinnati Bell to increase the prices of basic local services without traditional oversight should be overturned, the Office of the Ohio Consumers’ Counsel (OCC) told the Supreme Court of Ohio in an appeal filed today.

The appeal is based on a Nov. 28 decision by the Public Utilities Commission of Ohio (PUCO), which granted Cincinnati Bell the ability to raise the prices of basic local service and basic Caller ID in its two largest exchanges, serving consumers in and around the cities of Cincinnati and Hamilton. The PUCO decision approved “alternative regulation” for Cincinnati Bell in those exchanges, which enables the company to increase the monthly price of basic local service by up to $1.25 each year. The monthly price of basic Caller ID can increase as much as 50 cents per year.

“We believe the PUCO failed to follow the law when it established that Cincinnati Bell could impose rate increases on residential consumers for its most basic of telephone services,” said Janine Migden-Ostrander, Consumers’ Counsel. “The bottom line is that customers who only want and need simple basic telephone services should be assured that they are reasonably priced unless comparable choices are available. Since the only alternatives marketed to customers are more expensive packages bundled with options such as Call Waiting, there are no competitive choices for those residents.”

The PUCO’s rules were supposed to abide by a state law that requires telephone companies seeking alternative regulation to first show that choices exist for customers and that no barriers prevent competitors from entering the marketplace. The OCC believes the PUCO’s rules and its decision granting Cincinnati Bell’s request do not follow the law.

In the OCC’s appeal, it argues the PUCO made the following errors when granting Cincinnati Bell’s request by:

Failing to ensure that no barriers are preventing competitors from offering services.
Not requiring the company to demonstrate that competition exists for stand-alone basic service or that those customers who only want basic dial-tone service have alternatives.
Allowing the company to use the availability of telephone packages (which include features such as Call Waiting and Call Forwarding) to show alternatives to basic local service.
Permitting the company to use alternatives only available in part of an exchange as evidence of competition in the entire exchange. For example, wireless, cable or Internet-based services may not be available to all customers in an exchange.

Cincinnati Bell was the first of Ohio’s telephone companies to be granted alternative regulation for basic local service and basic Caller ID. In January, the company proceeded to increase its basic monthly rates by $1.25 - the maximum amount allowed per year.

Following the PUCO’s approval of Cincinnati Bell’s request, it granted AT&T alternative regulation for 136 of its 192 exchanges. AT&T has a pending request for 11 additional exchanges to be approved.

About the Office of the Ohio Consumers' Counsel

The Office of the Ohio Consumers' Counsel (OCC), the residential utility consumer advocate, represents the interests of 4.5 million households in proceedings before state and federal regulators and in the courts. The state agency also educates consumers about electric, natural gas, telephone and water issues and resolves complaints from individuals. To receive utility information, brochures, schedule a presentation or file a utility complaint, residential consumers may call 1-877-PICKOCC (1-877-742-5622) toll free in Ohio or visit the OCC website at www.pickocc.org.