TO: Mayor and Town Council
SUBJECT: Information Update on Telephone Service
DATE: March 26, 2001
The purpose of this report is to provide follow-up information on the status of telephone service issues in Chapel Hill. The key issue of note is that the Utilities Commission has begun the process toward an Extended Area Service (EAS) study, per the Council’s October 2000 request. We believe that BellSouth and Verizon have addressed most other telephone service issues raised by Chapel Hill residents.
BACKGROUND
On October 23, 2000, the Council adopted resolutions requesting the following:
· That BellSouth and Verizon study the option of redrawing telephone service boundary lines in Chapel Hill to avoid dividing neighborhoods, and to provide follow-up information to the Council within 90 days.
· That the N.C. Utilities Commission begin procedures to establish an Extended Area Service (EAS) plan for Chapel Hill and Durham.
The Council took these actions based on reports from citizens at both the July 5, 2000 and September 18, 2000 meetings. These citizens, who reside primarily along the eastern border of Town in both Orange and Durham counties, raised concerns that included:
1. Varying costs to call nearby telephone numbers, including neighbors who live across the street but who are served by another company.
2. Inconsistent telephone number listings in local directories, including directory assistance.
3. Connection problems and other service issues.
We provided the Council’s resolutions to both BellSouth and Verizon and arranged to meet with representatives of the two companies to discuss how to achieve the Council’s objectives. On January 17, we met with BellSouth’s:
· Kathy Hawkins, Regulatory and External Affairs Director/State Education Director
· Whitney Jones, Public Information Director of Regulatory and External Affairs
· Linda Cheatham, Director of Regulatory and External Affairs.
On February 7, we met with Verizon’s:
· Jim Crawford, Director of Regulatory and Governmental Affairs
· Steve Toler, Region Director of Public Affairs
· Ron Eaton, Area Manager.
Written responses from the two companies are included in the attached letters (Attachments 1 and 2) and summarized below.
We also sent the Council’s resolutions to the N.C. Utilities Commission. On February 2, the Mayor received a letter from Jo Anne Sanford, Chair of the Utilities Commission (Attachment 3).
DISCUSSION
Our discussion with the two telephone companies focused on the Council’s adopted resolutions:
Service Issues. BellSouth did not have any customer service issues that were brought to our attention by citizens.
Verizon representatives said that company representatives visited neighborhoods in the affected areas, going door-to-door to test lines. Verizon also contacted representatives of neighborhood groups. Mr. Eaton said that a common complaint was that phones were out of service at times. Verizon’s equipment improvements included:
· repairing wires at remote locations
· obtaining land for the addition of a new “remote distribution node” to better serve customers in more remote areas; and,
· upgrading lines that had degraded at points, thus better equipping the service to switch from analog to digital service lines and offer high-speed connections. (Since the meeting with Verizon, some customers in the area have alerted us that they have subscribed to another high-speed Internet service in this area, thus increasing their Internet connection speed.)
Boundary lines. BellSouth and Verizon both reported that a telephone boundary line change is not a viable alternative.
A boundary line change would require the agreement of the two companies through the establishment of a “boundary transfer.” Telephone service providers can agree to redraw service lines, although the N.C. Utilities Commission cannot require them to do so. In State of North Carolina ex rel. Utilities Commission v. Southern Bell Telephone and Central Telephone Company (1974), the N.C. Court of Appeals ruled that the Utilities Commission does not have the authority to compel a telephone company to provide local exchange service to an area already receiving such service from another public utility.
BellSouth representatives say that such a boundary change would involve installation of a significant quantity of network facilities to serve the boundary communities, and such a change is not economically feasible for the company. According to BellSouth, a proposal in which BellSouth and Verizon would trade customers was also ruled out because no BellSouth customers had requested to become Verizon customers. During our discussions, we asked if there were other types of concessions that would help the neighborhoods that were divided. Whitney Jones of BellSouth says that the two companies will meet with each other at a future date to discuss other ideas to help these customers.
Extended Area Service. Extended Area Service (EAS) would provide unlimited, flat-rate calling service, rather than a long-distance charge. The Extended Area Service option would eliminate the need for Verizon’s Chapel Hill Border Plan, because it would provide flat-rate calling between Verizon and BellSouth telephone numbers. The plan would most likely include a specific area, such as Chapel Hill and Durham.
BellSouth officials report that they:
· will not oppose an EAS program from Chapel Hill to Durham; and
· will not commit to an EAS program for the entire Triangle, stating that they require additional analysis of the issue.
Verizon officials report that the company will not support any EAS alternative. Mr. Crawford explained his opinion that:
· the current system is flexible enough because it offers a choice between the Border Plan (Chapel Hill local calling) and the Tri-Wide Plan (Durham local calling);
· the current system puts the burden of paying for the call on the “cost-causer,” while an EAS plan would subsidize the telephone service for those callers.
The N.C. Utilities Commission could authorize such a plan after studying the community of interest and the costs involved in establishing a flat-rate system. Hugh Gerringer, Telephone Engineer with the Public Staff of the Utilities Commission, estimates that this process could take a year or more to complete.
The Town’s EAS study request is currently at the Public Staff level of the Utilities Commission. Mr. Gerringer says that the first step will be for Verizon to conduct an EAS cost study from three exchanges:
The Commission staff hopes that Verizon will do the study voluntarily rather than having the Commission require it. Once the study results are available, the Commission staff will negotiate with Verizon what rate increases are appropriate for the Durham exchange customers, including those in the Chapel Hill Border Plan. Applicable rate increases for the Chapel Hill, Hillsborough, and Pittsboro subscribers can be determined without doing a cost study.
Directory Assistance and Number Listings. Residents have raised concerns over inability to locate numbers within Chapel Hill by using directory assistance. This can occur because there is no single provider of directory assistance information.
At BellSouth’s request, the Town Manager’s Office provided 12 random telephone numbers in the Verizon service area for BellSouth to conduct a test of its directory assistance system. Of the 12 numbers provided, 100% were correctly listed in local directory assistance and 11 were listed correctly in national directory assistance.
The Utilities Commission letter (Attachment 3) recognizes the Council’s concern that Chapel Hill subscribers served out of the Durham exchange be listed in both BellSouth’s and Verizon’s directories and included in both companies’ local directory assistance listings. Ms. Sanford, chair of the Commission, says she believes that existing Commission orders require this listing.
Ms. Sanford’s letter also states the Commission’s limited authority over intrastate directory assistance service provided by long-distance carriers. The Commission lacks jurisdiction over directory assistance service provided by interstate long-distance companies, which is viewed as a competitive business. (BellSouth and Verizon have also provided the same explanation.) “The range of directory assistance options available to customers makes it difficult for the Commission to ensure that directory assistance service is accurate and provided at reasonable prices,” Ms. Sanford’s letter explains.
Telephone Directory Charges. Citizens have informed the Council of varying charges and availability of telephone directories.
BellSouth annually delivers updated directories at no charge. BellSouth also provides:
Verizon will provide:
· free directories at the Chapel Hill Town Hall, Public Library, the Chapel Hill-Carrboro Chamber of Commerce, and at Verizon company stores;
· directory information on the Internet at www.superpages.com;
· both Verizon and Triangle area directories to the neighborhood associations of Silver Creek and Chandler’s Green.
The Utilities Commission has jurisdiction over the “white pages” section of local telephone directories, although the directories are prepared by each company using a standard format. Ms. Sanford’s letter states that, “The Utilities Commission could not reasonably require all local exchange companies to use the same ‘white pages’ format without carefully examining whether such a decision of this nature could only be made during a formal regulatory proceeding. Having said this much, it is not my impression that there is a significant difference in the format and basic contents of the directories distributed by BellSouth and Verizon.”
Uniform Service Standards. On October 23, the Council adopted a resolution that petitioned the Utilities Commission to require telephone service providers to meet uniform service standards for all Chapel Hill citizens.
The Utilities Commission requires telephone companies to meet a uniform list of technical quality service standards. Ms. Sanford’s letter explains that in recent months, the Commission has spent considerable time attempting to improve monitoring of local service quality in order to take appropriate enforcement action. “Thus, we do have uniform technical service quality standards as is requested in your October 31, 2000, letter, and we have escalated our focus on compliance with these standards.”
Steps to Encourage Local Competition. We have mailed letters to 13 other local service providers, inviting them to contact the Manager’s office to find out about Chapel Hill. To date, two providers (LecStar Communications and Alltel) have contacted the Manager’s office and expressed interest. Representatives of LecStar and Alltel plan to do more research on the area and said that they would contact us for further information. We will follow up with these individuals regarding their plans and offer any assistance that we can.
Triangle J Involvement. Representatives of the Triangle J Council of Governments attended both meetings with BellSouth and Verizon and have offered their support (Attachment 4).
Manager’s Office staff will stay in contact with the Utilities Commission staff regarding progress on the Extended Area Service study and any potential hearings on that subject. We understand that the required cost studies have begun.
We believe that the customer service issues voiced by Verizon customers have largely been resolved, based on the information provided to us by Verizon and on the reduction in complaints we have received from citizens. However, we will inform Verizon of any further complaints that we receive in those areas.
We also believe that there is nothing further that the Council can do regarding boundary lines at this time, given that the companies do not see the option as economically feasible and that the Utilities Commission is unable to require any change.
We believe that the issue of directory assistance and the provision of free telephone directories has been satisfactorily addressed by both companies. The companies have committed to following up on further customer needs and are agreeable to receiving future suggestions from the Manager’s Office.
We will also stay in contact with other telephone companies who may be interested in providing local service in Chapel Hill.
Later in the year, we will return to the Council with a follow-up report on EAS and other telephone service matters.
1. Response from BellSouth (p. 7).
2. Response from Verizon (p. 10).
3. February 2, 2001 letter to Mayor Waldorf from Jo Anne Sanford, Chair of the N.C. Utilities Commission (p. 13).
4. November 16, 2000 letter to Mayor Waldorf from Dee Freeman, Executive Director of Triangle J Council of Governments (p. 17).
5. October 23, 2000 Status Report on Telephone Service Issues (p. 18).
6. October 23, 2000 Report from Meeting with Legislators on Telephone Issues (p. 27).