Verizon, BellSouth, and Sprint-Florida: Rate Rebalancing Petitions
Economic Advice in Litigation
The Situation
Verizon Inc., BellSouth Telecommunications, Inc., and Sprint-Florida Inc. asked the Florida Public Service Commission to restructure their rates for access services and basic local telecommunications services. The Commission approved the telecommunication providers' "rate rebalancing" petitions, but was challenged by numerous intervenors. The case subsequently went before the Florida Supreme Court.
NERA's Role
NERA Special Consultants Dr. Kenneth Gordon and Dr. William Taylor filed direct testimony before the Commission in August 2003. Dr. Gordon and former NERA Vice President Dr. Andy Banerjee filed rebuttal testimony in November 2003 and were cross-examined in hearings before the Commission. Dr. Gordon was asked to provide an economic and policy analysis of the rate plans and to determine if those plans met the public policy criteria laid out in Florida's public utility statutes, while Dr. Taylor discussed economic issues arising from the then newly-created statutes on competitive market enhancements, price floors, and reduction of intrastate switched access prices to parity with interstate price levels. On rebuttal, Dr. Banerjee testified on issues relating to the promotion of greater competition that would benefit customers.
The Result
In July 2005, the Florida Supreme Court issued a ruling affirming the Commission’s original decision to allow the three local telephone companies to rebalance their rates. The Court agreed with Dr. Gordon’s and Dr. Banerjee’s findings and directly cited their testimony in the decision.
