If the Federal Communications Commission next month approves Verizon’s bid to
offer long-distance service in Rhode Island, the carrier won’t waste any time
launching the program.
"We’ve already prepared our system," said Tracey Kennedy, spokeswoman for Verizon in Rhode Island. "When the decision is rendered, and we’re hoping it will be a positive one, we’ll be ready to roll out long-distance service to customers in March."
Verizon filed for permission from the FCC in late November to offer long-distance service in Rhode Island, following the Public Utilities Commission unanimous decision to recommend its approval. The FCC should announce a decision by Feb. 24.
The PUC agreed with Verizon’s assertion that its entrance into the long-distance market would spark competition among carriers and create savings for consumers and businesses.
"The division has long supported the idea of competition among telecommunications service providers in the Rhode Island marketplace, so that consumers may enjoy choice in service and pricing options," said Brian Kent, a telecommunications specialist at the Rhode Island Division of Public Utilities and Carriers.
Verizon and other regional bell operating companies, or Baby Bells, had been prohibited from providing long distance service until passage of Telecommunications Act of 1996. The legislation allows those companies to sell long distance as long as they can prove to the FCC that their local telephone-service market is open to competitors, by allowing them to lease space on Verizon’s network at reasonable rates, for example.
Since 1999, Verizon has launched long-distance service in Pennsylvania, Connecticut, New York and Massachusetts, taking substantial market share away from competitors such as AT&T and WorldCom.
Now, it plans to shake up the long-distance market by offering customers the chance to receive one bill for both long distance and local service – without extra fees that long-distance carriers levy for consolidating charges on one bill.
"No matter where I go in the state, the question from people is always the same," Kennedy said. "‘When am I going to have Verizon as my long-distance carrier, so I can get a single bill for local and long distance?’"
Imran Khan, a senior analyst at the Boston-based consulting firm, Yankee Group, said Verizon likely will make the single-bill advantage its centerpiece strategy for penetrating the Rhode Island market.
"Single billing really is the No. 1 reason why consumers are interested in switching to (regional bell operating companies)," Khan said. "That convenience factor will be key."
Verizon could take it a step further by giving customers one monthly bill for local, long distance, wireless and Internet service. It recently launched such a promotion, called "One Bill," in New York and Massachusetts, and Kennedy said that program likely would be introduced in Rhode Island eventually.
But Khan downplayed the price competition that would be generated by Verizon’s plunge into Rhode Island’s long distance market. He said there is little room for long-distance rates to go much lower, following fierce price wars among carriers nationally in recent years.
"These companies are in a tough spot with long distance because usage continues to erode," Khan said, adding that wireless phones, e-mail and instant-messaging services have cut into long-distance revenues. "I don’t think that prices would go down (after Verizon’s entrance)."
Verizon officials insist, though, that they have been able to undercut long-distance rates in other states and plan to do the same here.
"We look forward to offering Rhode Island consumers savings similar to those enjoyed by our neighbors in Massachusetts," said Donna Cupelo, Verizon regional president for Massachusetts and Rhode Island. Verizon began offering long-distance service in the Bay State last April.
For smaller Massachusetts businesses, Verizon offers a 9-cents-a-minute plan for state-to-state calls, with no monthly fee. Another plan offers businesses 7 cents a minute for state-to-state calls when they subscribe to a certain local service.
Kennedy added that Verizon should be able offer better deals to business customers by bundling several services, similar to the One Bill plan for residential customers.
There’s a good chance that Verizon might add to its 1,200-employee workforce in Rhode Island to support the new long-distance service, although Kennedy said she could not discuss any specific plans or peg a number of new jobs.
Verizon spent $71 million in Rhode Island over the past year, laying new fiber-optic cable and equipping call-routing centers with new hardware and software. Its network in Rhode Island, valued at $1.2 billion, includes 92,000 miles of fiber-optic cable.
