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Appeal of Verizon’s landline phone deregulation in New Jersey moves forward

 Telephone poles in Cumberland County, where residents have complained of issues with their phones. A recent decision from the Board of Public Utilities would deregulate rate increases for Verizon's landline telephone service. (Joe Hernandez/WHYY)

Telephone poles in Cumberland County, where residents have complained of issues with their phones. A recent decision from the Board of Public Utilities would deregulate rate increases for Verizon's landline telephone service. (Joe Hernandez/WHYY)

Earlier this year, the New Jersey Board of Public Utilities struck a deal to “reclassify” Verizon’s landline telephone service, allowing the company to increase customer rates without state oversight.

A bid to overturn that decision in a state appeals court inched forward this week.

“We were just presented with the settlement [in May] and were very concerned about it, so we appealed it,” said Stefanie Brand, director of the Division of Rate Counsel, the independent state agency that advocates on behalf of utility customers.

The group filed the contents of its appeal on Wednesday, calling the BPU’s deal with Verizon “arbitrary, capricious, and contrary to law.”

The origins of this fight go back decades.

Verizon is what some call the “provider of last resort” for landline telephone service in New Jersey, a historical designation meaning it must provide the service to almost anyone who asks for it. Because of that, it had been regulated as a utility and prevented from exorbitant rate increases.

But, according to Verizon, state regulation of its prices has kept it from thriving in an increasingly competitive telecom market in New Jersey.

“[Reclassification] just gives us way more flexibility in the pricing of our services based on the competitive environment while continuing to be subject to service quality obligations,” said Verizon spokesman John O’Malley.

“This did not deregulate our service at all.”

According to Brand, there may be competition among telecom companies for customers looking for beefed-up wired service or cell phone coverage, but that leaves out consumers who want a bare-bones landline phone in their homes.

“There’s actually no competition for people who just want a basic single landline service,” Brand said.

“This is just your grandmother who only wants a phone to call her kids and her grandkids and doesn’t need all of those other gadgets.”

The move to further deregulate Verizon has also worried some customers who already say the BPU has ignored their complaints over the company’s service.

“If it rains, forget it, we don’t even try it,” said Cumberland County farmer Fred Van Meter of his copper landline telephone, which routinely loses service or is overcome with static in bad weather.

“I’ve lived here. I know the number by heart. So I don’t wanna give it up,” he said. “But, I mean, it’s definitely unreliable. Definitely.”

The BPU’s “reclassification” of Verizon’s landline telephone service will be phased in gradually. Over the next five years, rate increases for the company’s landline telephone service will be capped. After that, Verizon will be free to set landline telephone rates as it pleases.

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