Hearing touches on matters of race as well as telephone company’s rates

BY GREG EDWARDS
TIMES-DISPATCH STAFF WRITER Nov 23, 2004

Verizon’s commitment to black Virginians was questioned yesterday as a State Corporation Commission hearing got under way on the phone company’s proposed new regulatory plan.

Raymond H. Boone, editor and publisher of the Richmond Free Press, state Sen. Henry L. Marsh III, D-Richmond, and others criticized Verizon’s minority hiring practices; Boone and Marsh were among those questioning Verizon’s refusal to advertise in the minority-owned Free Press.

A Verizon spokesman later said that the Free Press’ verified circulation is not large enough to justify advertising.

Retired Richmond Circuit Judge James E. Sheffield, who appeared as a private citizen, levied similar allegations at Verizon and asked why the company didn’t have a black lawyer representing it at the hearing. Verizon attorney Jennifer McClellan asked Sheffield if he was unaware that she is an African-American.

As Sheffield left the SCC courtroom, a Verizon executive, a black woman, followed him into the hallway and was overheard telling him that 40 percent of the company’s executives in Richmond are black. «If that’s true,» Sheffield said afterward, «it’s a story that needs to be told.»

The woman declined to talk with a reporter, but Verizon spokesman Harry Mitchell confirmed that her figures were correct regarding the company’s middle and upper level managers in Virginia. Black executives include the company’s construction director for all of Virginia and its customer operations manager for southern Virginia, Mitchell said. Verizon spent $31 million with minority suppliers in Virginia last year, Mitchell added. VERIZON

The state commission also heard opening statements from Verizon and other phone companies participating in the regulatory case.

Verizon, the state’s largest local phone company, said it needs a new state regulatory plan, because the growth of competition from the Internet and wireless and competitive local phone companies in Virginia. The company said it requires more flexibility if it is to compete on a fair basis.

Verizon lawyer Lydia Pulley said the company’s current plan was approved in 1994 when competition was not legal, Verizon served 100 percent of its territory, the Internet was in its infancy and wireless phone companies were few. Competitors, who serve 1 million Virginia phone lines and 30 percent of Verizon’s traditional market, are fighting the proposal because it would put Verizon on an equal regulatory footing with them, Pulley said.

The proposal would allow Verizon to raise its basic residential and business rates to the highest Verizon rate in the state. For example, small businesses in some localities pay a $21.96 basic rate, but it could rise under the plan toward $53.18, the current highest rate. Rate increases would be limited to 10 percent per year, but the ceiling could also rise yearly with inflation.

The proposed plan would also eliminate some service quality requirements for raising rates and some of the reports Verizon must file with the SCC. It would allow, but not require, the company to reduce its access charges on long-distance companies, charges that help subsidize phone service in rural areas where costs are greater.

Long-distance carriers AT&T and MCI said they support Verizon’s proposal but want the access charges, which they pass on to consumers, reduced immediately. They also said that in a competitive market, Verizon should not expect a guarantee that revenues lost from cutting access charges would be replaced by some other source of revenue.

A coalition of competitive phone companies, the state attorney general’s consumer counsel, the SCC staff and others argued that Verizon had not shown that it meets four conditions set out in state law for approval of a new regulatory plan, including that the plan be in the public interest. Competitors said they were concerned that if the plan is approved, Verizon will lower its rates for basic and optional phone services and squeeze them out of business.

SCC staff attorney Robert Gillespie told the commission that it had a positive duty under state law to protect the affordability of local phone service. Under Verizon’s plan, some customers in rural areas may wind up paying more and receiving less service than those in more populated areas, he said.

Other public witnesses said they were also concerned about the impact of the plan on rural consumers and economic development.

Rural residents, including the low-income elderly, and small businesses will be forced to pay more for service that is no better than it ever has been, said Irene Leech, president of the Virginia Citizens Consumer Council. And the plan will increase Verizon’s ability to manipulate the marketplace to hurt competitors, she said.

The hearing continues today. A decision is expected by early January.

Any ideas? Staff writer Greg Edwards can be reached at (804) 649–6390 or gedwards@timesdispatch.com

Company Makes DSL High-Speed Internet Service Available to 187,000 More Phone Lines Across State in 2004

HARRISBURG, Pa., /PRNewswire/ More Pennsylvania consumers and businesses are benefiting from one of the nation’s most advanced broadband telecommunications networks, thanks to Verizon’s aggressive network investment in the state.

The company expects to make Verizon Online DSL high-speed Internet service available on about 187,000 additional telephone lines across the Keystone State this year. Currently, approximately 80 percent of Verizon’s Pennsylvania phone lines are qualified for DSL service.

«Verizon is delivering on its promise to provide broadband capability throughout the commonwealth,» said Verizon Pennsylvania President and CEO James V. O’Rourke. «Our investment in new network technology will improve Pennsylvania’s economy, bring new jobs to the state and improve the standard of living for all residents.»

Verizon has invested more than $8.5 billion in its Pennsylvania network while operating over the last decade under an alternative regulation plan known as Chapter 30.

«We want to provide the technology Pennsylvania needs for success in the 21st century by investing in the broadband future as aggressively as we can,» O’Rourke said. «The boundless potential of broadband is creating new opportunities for consumers, small and large businesses and entrepreneurs who use our networks.»

Examples of Verizon’s most recent additions of DSL-capable lines in Pennsylvania include 8,000 lines in Mechanicsburg, Cumberland County; 5,000 lines in Ellwood City, Lawrence County; 4,000 lines in Hollidaysburg, Blair County; 10,000 lines in the Poconos area; and more than 5,000 lines in several Berks County towns.

Currently, Verizon Online is offering its basic consumer DSL service for $29.95 per month in an annual service plan or when purchased in combination with Verizon Freedom or another Verizon local or long-distance bundle. This service offers a maximum connection speed of 1.5 Mbps (megabits per second) downstream and 384 Kbps (kilobits per second) upstream.

Verizon Online has also enhanced its DSL service by introducing a super-fast maximum Internet connection speed of 3 Mbps (megabits per second) downstream and 768 Kbps (kilobits per second) upstream for as low as $39.95 per month in an annual service plan when purchased as part of a package of calling services. In addition, the company has lowered the cost of its entry-level business service.

«The surest way to fuel growth in telecommunications is to adopt public policies that foster competition and investment in technology of the future,» O’Rourke said. «The state Senate currently is considering legislation that would do just that.

»We urge the General Assembly and the governor to approve this legislation, which will encourage investment that will deliver long-term economic benefits to all Pennsylvanians."

Verizon Communications Inc. (NYSE: VZ — News) is one of the world’s leading providers of communications services. With a diverse work force of approximately 208,000, Verizon has four business units: Domestic Telecom serves customers based in 29 states with wireline telecommunications services, including broadband, nationwide long-distance and other services. Verizon Wireless owns and operates the nation’s most reliable wireless network, serving 42.1 million voice and data customers across the United States. Information Services operates directory publishing businesses and provides electronic commerce services. International includes wireline and wireless operations and investments, primarily in the Americas and Europe. For more information, visit [ >>> ]

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at [ >>> ] To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.

Other phone companies oppose its plan to raise prices 10 percent a year in rural areas.

BY CHRIS FLORES

The battle over whether Verizon should have the right to raise phone prices 10 percent a year in rural areas has continued to get more intense.

A coalition of Verizon’s rivals recently sent letters to local governments and chambers of commerce asking them to oppose the phone giant’s plan. Verizon wants the ability to raise rates in rural areas such as Gloucester, which would allow the firm to shake out competitors by dropping prices in more expensive areas like Hampton Roads.

«Competition has not taken root in much of Virginia and Verizon’s plan would weaken those companies trying to bring increased competition and lower rates,» says the letter from the Competitive Carrier Coalition.

The question of whether Virginia should further deregulate the phone business and stop treating Verizon like a monopoly mirrors the national conflict. The Baby Bells successfully have argued at the federal level that they should be freed from sharing their networks at cheap rates with competitors. Now Verizon is taking the fight over pricing to the state level.

«Competitors don’t have the luxury of an imbedded customer base to raise prices without repercussion,» said Marty Clift, vice president of regulatory affairs for Richmond-based Cavalier Telephone, a leader of the coalition.

Verizon is forced by regulators to charge less in rural areas because there are fewer customers within a local calling area. But Verizon says it is more expensive to provide service in the country, which is subsidized by higher prices in urban areas where heavy competition is emerging.

Verizon argues that it should be freed from price restraints because its dominance has faded. Competitors like Cavalier, cell phone companies, e-mail, Internet-based phone service and cable firms such as Cox Communications have swiped Verizon customers.

And Verizon is fighting back against the coalition’s efforts to stir grassroots opposition. Verizon has filed a legal request to get the coalition to hand over the names of all the chambers that received a letter from the group and the business plan of each coalition member in rural areas.

Verizon will send its own rebuttal to chambers, painting the coalition as a group that doesn’t care about or serve the rural areas and is trying to fend off Verizon in the cities. Verizon also will argue that increases are not guaranteed and prices for basic service haven’t changed since 1984.

Verizon’s plan would allow it to raise rates by 10 percent a year, and the company could raise prices for services like Caller ID and Call Waiting any time it wants.

State regulators must now approve these increases and link them to customer service performance standards — a process that would be eliminated under the new formula.

The competitors’ coalition pointed out that Verizon will be allowed to gradually raise rates for businesses up to $53.18, double the current costs for some rural customers.

State regulators have said Verizon might be able to come up with a workable plan, but the current one failed to meet any of the four criteria of affordability and service quality necessary to get a new proposal approved. The coalition seized on this finding in its letter to local officials.

The coalition urged local officials to oppose the plan by attending a public hearing in Richmond on Nov. 22, passing local resolutions and contacting legislators. The Isle Of Wight-Smithfield-Windsor Chamber of Commerce was the first rural chamber to get involved back in August.

Constance Rhodes, the chamber president, doesn’t agree with Verizon’s assertion that price increases could draw more competition into counties. She worries about how the hikes will affect small businesses and the spending power of low-income consumers in rural areas.

«It could possibly have an impact on rural economic development,» said Rhodes.

Many lawmakers might not realize the degree to which they enabled the action by Verizon, which initially tried to accomplish the same goal through a failed bill carried by Sen. Thomas K. Norment Jr., R-James City, a year ago.

After receiving strong opposition, Verizon changed the bill to a generic policy statement promoting competition in the state. Verizon has relied on this language as it has pushed the plan and an administrative judge also said in a separate, related case that the bill requires state regulators to consider changing how they regulate Verizon.

Verizon receives high fees from long-distance carriers like Sprint and AT&T for connecting long-distance calls within Virginia. The fees are used to subsidize Verizon’s service in rural areas. But the administrative judge ruled that those fees make it harder for companies like Sprint to compete for long-distance service and ordered Verizon to reduce them.

(PRESSI.COM 11/11/2004) Popular Packages Offer Budget Predictability, Convenience and Savings

TAMPA, Fla. — Verizon is freeing small businesses in the Greater Tampa Bay area from per-minute usage charges and unpredictable telecommunications bills by introducing Verizon Freedom for Business, a calling package that offers unlimited usage for a fixed monthly fee. This package includes unlimited direct-dialed local, regional and domestic long-distance calls, with options for significant discounts on toll-free service and feature packages -- all on one convenient bill.

The new Freedom for Business package is part of Verizon’s strategy to better serve small businesses by delivering products and services specifically designed to meet the needs of these businesses. It is a strategy that is resonating with small-business customers. Since the package’s introduction elsewhere in May 2003, approximately 500,000 customers have signed up.

Verizon Freedom for Business elminates the per-minute usage fees associated with business calls. The flat monthly rate gives small businesses the predictability they need to accurately budget their telecommunications costs, and enables them to save money as well.

«This is not a temporary promotion. Eliminating usage charges is a fundamental change in the way we do business,» said Chris McKay, Verizon’s executive director-business marketing. «We don’t want customers to have to think about the costs associated with making business calls. And we know they would rather be growing their business than spending time each month reviewing the charges on their bill.»

Value, Simplicity, Flexibility Equal Freedom for Small Businesses Verizon Freedom for Business includes unlimited direct-dialed local, regional and domestic long-distance, billed on ONE-BILL, for $32 a month in Florida, plus approximately $30 in local line charges. Verizon ONE-BILL consolidates charges for the company’s local, long-distance, wireless, DSL and other optional services. Long-term commitments are optional for Verizon Freedom for Business and feature rates as low as $27 a month. Taxes and fees may apply.

«Designed for small businesses with up to 10 lines, Verizon Freedom for Business offers unprecedented flexibility at very competitive rates, easy to understand packages and the convenience of getting all the charges on one bill,» said McKay.

The Verizon Freedom for Business package also qualifies customers for additional discounts on the most popular services for small business including inbound toll-free calls at 6 cents per minute and deeply discounted feature packages.

In addition to the six counties in west central Florida served by Verizon (Hillsborough, Pinellas, Manatee, Sarasota, Pasco and Polk), Verizon Freedom for Business is also available in California, New Jersey, New York, Pennsylvania, Maryland, Massachusetts, Rhode Island, Virginia and Washington, D. C. For additional information, customers can visit the Verizon Web site at www.verizon.com/verizonfreedomforbusiness, or call Verizon at 1–866–424–6659.

Verizon Communications Inc. (NYSE:VZ) is one of the world’s leading providers of communications services. With a diverse work force of approximately 208,000, Verizon has four business units: Domestic Telecom serves customers based in 29 states with wireline telecommunications services, including broadband, nationwide long-distance and other services. Verizon Wireless owns and operates the nation’s most reliable wireless network, serving 42.1 million voice and data customers across the United States. Information Services operates directory publishing businesses and provides electronic commerce services. International includes wireline and wireless operations and investments, primarily in the Americas and Europe. For more information, visit www.verizon.com.

Customers Can Save $10 a Month

THOUSAND OAKS, Calif., Nov. 9 /PRNewswire/ -- Verizon customers in California now have a new option available in the Verizon Freedom suite of packages and can further trim their monthly bill by also ordering either Verizon Online DSL Internet Service, Verizon FiOS Internet Service or DIRECTV® entertainment service, or by linking their home and Verizon Wireless bills.

Verizon Freedom Unlimited is the newest addition to the Freedom portfolio.

Like the original Freedom calling plans, Verizon Freedom Unlimited includes unlimited direct-dialed local, regional toll and domestic long-distance calling, and the most popular calling features such as caller ID and Call Waiting. And at $54.95, the new plan costs $5 less per month than the original Verizon Freedom plan. Home Voice Mail and unlimited calling to Canada are not included in the new plan. Customers who desire unlimited calling to Canada, or more robust calling features, such as Home Voice Mail, or both, are still best served by the original Verizon Freedom packages. They offer between five and 14 value-added services, including Home Voice Mail and calling to Canada. With the new plan, customers have their choice of up to three calling features. Calls to Canada will be billed based upon the customer’s choice of international calling plan.

In addition, customers qualify for a $5 discount off the local calling portion of the package if they order some form of a bundle, including the addition of Verizon Online DSL; dial-up Internet access (billed on the Verizon bill); DIRECTV services purchased through Verizon; Verizon FiOS Internet service in areas served by Verizon’s innovative fiber-to-the-premises project; or who choose the ONE-BILL® option to include their Verizon Wireless billing on their regular Verizon bill.

This new $5 discount on more expansive bundles that include affiliate products is now available with any of the Freedom plans and selected other packages. Other savings still apply, including $5 off DSL when paired with an applicable calling plan, and bottom-line discounts of $2 to $6 when DIRECTV is purchased with a local and long-distance calling plan, Internet access, or both.

«We’ve increased the options and services available to Freedom customers to make the bundles even more valuable and more easily customized to our customers’ needs,» said Judy Verses, senior vice president of national marketing for Verizon’s Retail Markets Group. «The increased options available to customers in the Freedom packages solidify Verizon’s position as the bundle leader in an industry crowded with look-alikes and me-too players. Customers, however, are not fooled by packages that don’t make sense and don’t fit their family’s calling needs.»

Verizon lets customers customize their bundles, selecting from an array of calling packages that offer bundled local and long-distance, as well as DSL and DIRECTV service.

Verizon Communications Inc. (NYSE: VZ — News) is one of the world’s leading providers of communications services. With a diverse work force of approximately 208,000, Verizon has four business units: Domestic Telecom serves customers based in 29 states with wireline telecommunications services, including broadband, nationwide long-distance and other services. Verizon Wireless owns and operates the nation’s most reliable wireless network, serving 42.1 million voice and data customers across the United States. Information Services operates directory publishing businesses and provides electronic commerce services. International includes wireline and wireless operations and investments, primarily in the Americas and Europe. For more information, visit [ >>> ]

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts, high quality video and images, and other information are available at Verizon’s News Center on the World Wide Web at [ >>> ] To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.

Citing growth in wireless, long-distance and broadband services, Verizon reported Q3 revenue of $18.206 billion, up 6.7% over the same period last year. Q3 earnings were $1.8 billion -- 64 cents per diluted share, or 65 cents per share before one special item. For the first time, Verizon Wireless contributed more than 40 percent of Verizon’s total revenues. Some highlights for Q3:

Verizon Wireless: added 1.7 million net new customers, the largest quarterly customer increase in the history of the company, which was formed in April 2000. The total number of customers grew 16.9 percent year-over-year to 42.1 million, including 40.2 million retail customers. Average monthly churn was 1.5%. Average monthly service revenue per customer increased 3.1 percent year-over-year to $51.58.

Data services usage continued to climb, contributing $300 million, or 4.7 percent, of third-quarter 2004 total service revenues, up from 4.2 percent in the second quarter 2004 and 2.3 percent in the third quarter of 2003. More than one-third of the company’s base -- 14.6 million customers -- use data services and spend an average of $7 per month on data. During Q3, Verizon Wireless logged 2.6 billion text messages, 25.5 million picture messages and 26.8 million Get It Now downloads.

Long Distance: revenues for all LD services, including traditional intra-region toll services, increased 8.7 percent compared with third quarter 2003, to $1.1 billion in the quarter. The company had 17.3 million long-distance lines in service as of the end of the quarter, an increase of 525,000 lines compared with the second quarter 2004.

DSL: added a net of 309,000 DSL lines for a total of 3.3 million lines in service, representing 1.1 million net additions over the past year. The company also began rolling out FiOS fiber-optic-based services in the third quarter 2004.
Data: Revenues (including DSL) were $2.0 billion. Data revenues represented 21 percent of Domestic Telecom’s total operating revenues in the quarter, up from 18 percent in the third quarter 2003.

Bundles: Approximately 53 percent of Verizon residential customers have purchased local services in combination with either Verizon long-distance or Verizon DSL, or both. This compares with 41 percent in the third quarter 2003. The average revenue per month per Verizon residential wireline customer increased by 4.4 percent in the third quarter 2004, compared with the third quarter 2003.

UNE-P: Resale and Unbundled Network Element-Platform (UNE-P) lines totaled 6.7 million at the end of the third quarter 2004, up from 5.4 million at the end of the third quarter 2003. For UNE-P only, this is a 105,000 increase from the end of the second quarter 2004, which is significantly less than in prior quarters this year. The company had 53.7 million switched wireline access lines in service as of the end of the third quarter 2004.

Employees: 208,240 compared to 219,927 at the same time last year.

Verizon Will Include Linksys ’phone Adapter With 2 Ports’ in Its VoiceWing Broadband Phone Service Installation Kits Starting This November

NEW YORK and IRVINE, Calif., Customers of Verizon’s VoiceWing Broadband Phone Service will enjoy more features and an even faster, simpler service installation starting in November when Verizon begins including a «Phone Adapter with 2 Phone Ports» from Linksys® in VoiceWing installation kits.

The phone adapter is a small piece of equipment that sits on the customer’s desk top and converts analog telephone calls into digital packets that travel over the Internet. It also enables certain calling and call-management features for the VoiceWing service.

«The new phone adapter from Linksys will allow us to provide additional services for our VoiceWing customers in the future and includes technology that will help customers get their service up and running more quickly than ever before,» said Michelle Swittenberg, executive director of consumer and small-business VoIP services for Verizon. «It’s a small, sleek device with two phone ports that will ultimately support our customers’ ability to add another phone line or fax line to their service.»

Charlie Giancarlo, Cisco-Linksys president, said, «Combining Verizon’s VoiceWing Broadband Phone service and our Linksys Phone Adapter provides a complete solution to getting home users up and running with a high quality broadband VoIP phone service. Linksys believes that VoIP will be a leading application with the use of a broadband connection in the home over the next year. Our relationship with Verizon will help to educate the market and drive demand while at the same time offering quality service, support and products that today’s home-user demands.»

Verizon Long Distance introduced VoiceWing Broadband Phone Service in July to provide broadband users nationwide with low-cost flat-rate, unlimited local and domestic long-distance calling services over the Internet. The service works in conjunction with DSL or cable modem broadband connections and includes a wide variety of online call management tools that give customers more flexibility and control over their daily communications. These features include call logs, click-to-dial, enhanced call-forwarding, scheduled call-back, phone-based and online voice mail, personal address book and more.

VoiceWing also offers low international calling rates, 411 directory assistance and a back-up number that directs calls to another phone number in case of a power or broadband outage. The service is portable and gives customers the freedom to use their adapter with any DSL or cable modem broadband connection.

About Linksys

Founded in 1988, Linksys, a division of Cisco Systems, Inc. (Nasdaq: CSCO — News) is the global leader in Wireless and Ethernet networking for consumer and SOHO users. Linksys is dedicated to making networking easy and affordable for its customers, offering innovative, award-winning products that seamlessly integrate with a variety of devices and applications. Linksys provides 24/7 Grade «A» product support to all its customers. For more information, visit the Linksys web site at www.linksys.com. Linksys is a registered trademark of Cisco Systems, Inc.

About Verizon

A Dow 30 company, Verizon Communications (NYSE: VZ — News) is one of the world’s leading providers of communications services, with approximately $68 billion in annual revenues. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the largest directory publisher in the world, as measured by directory titles and circulation. Verizon’s international presence includes wireline and wireless communications operations and investments, primarily in the Americas and Europe. For more information, visit www.verizon.com.

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts and other information are available at Verizon’s News Center on the World Wide Web at www.verizon.com/news. To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.

The country’s largest local telephone company, Verizon Communications Inc., on Wednesday agreed to sell its directory business in Canada to Bain Capital for $1.54 billion.

Verizon, based in New York with regional offices in Pittsburgh, said the sale to Bain, a private investment firm in Boston, was subject to regulatory approvals but expected to conclude by the end of 2004.

The directory operations, SuperPages Canada, is that country’s second-largest directories publisher. The sale includes online directory operations, according to Verizon, which is also the United States’ third-largest provider of long-distance service.

SuperPages Canada, which is an affiliate of Verizon Information Services, had revenue in 2003 of $293 million. The company will continue using the SuperPages name after the sale to Bain.

«SuperPages Canada is a highly regarded, stable franchise with an outstanding history of service to its customers,» said Ian Loring, a managing director at Bain.

Bain has more than $26 billion in assets under management. The firm was founded in 1984 and says it has made investments or acquisitions involving some 225 companies worldwide.

Consumers Who Click ’yes’ to Pop-Up Ad Questions Without Reading The Fine Print Could Be Agreeing to Have Their Modems Programmed to Automatically Dial Expensive International Long-Distance Calls

NEW YORK, Aug. 30 /PRNewswire/ -- Consumers should read the fine print before clicking «yes» or «I accept» to questions that appear on so-called pop-up ads while browsing the Web. They could be agreeing to install software on their computers that then dials international locations. The result could be significant, and perhaps unexpected, international long-distance charges for which the customer is responsible.

This scam, known as «modem hijacking,» occurs when a computer user sees certain ads pop up on the screen while visiting a Web site. If the user clicks on the pop-up, a series of questions appears asking the user to choose a «yes,» «I agree,» or a similarly phrased button to agree to the terms and conditions of the ad. A positive response to the question triggers a software download to the user’s computer — which will then automatically dial the international phone numbers at random times without the customer knowing it.

The Federal Trade Commission, in response to increasing incidents involving this scam, has posted a consumer alert on its website at: [ >>> ] .

Consumers should always carefully read the disclosures, terms and conditions before agreeing to questions in on-line ads or permitting software to be installed on their computer.

John Broten, president of Verizon Long Distance advises: «If you have any doubt, do not agree to the download. If you do, you are essentially allowing someone, unknown to you, to use your computer. This may generate significant long-distance charges that you will be responsible for paying.»

The ads associated with the scam often promise entertainment for free, which Broten notes, «should be a warning to consumers, since there is no such thing as a free lunch.» The scam is primarily aimed at dial-up Internet users, not those who use a broadband connection such as DSL or cable modems. However, a word of caution to broadband users: If you still have a telephone line connected to your modem -- to send faxes, for example -- you are still vulnerable to this scam.

Internet access account owners in a household or business should make sure that all family members and others who might use the computer are aware of the potential scam.

Customers can take preemptive action to better protect themselves from these scams and unexpected charges that may result.

Here are the key points to consider:
-- Carefully read all the terms and conditions of any offer before
downloading anything to your computer; unless you fully understand
everything you are agreeing to, do not accept the download.

-- Contact a reputable software vendor about programs that block pop-up
ads («pop-up blockers»), and identify and remove the types of programs
that may be associated with modem-hijacking scams.

-- Disconnect the telephone line to your modem when it is not in use.

A Dow 30 company, Verizon Communications (NYSE: VZ — News) is one of the world’s leading providers of communications services, with approximately $68 billion in annual revenues. Verizon companies are the largest providers of wireline and wireless communications in the United States. Verizon is also the largest directory publisher in the world, as measured by directory titles and circulation. Verizon’s international presence includes wireline and wireless communications operations and investments, primarily in the Americas and Europe. For more information, visit [ >>> ] .

VERIZON’S ONLINE NEWS CENTER: Verizon news releases, executive speeches and biographies, media contacts and other information are available at Verizon’s News Center on the World Wide Web at [ >>> ] . To receive news releases by e-mail, visit the News Center and register for customized automatic delivery of Verizon news releases.

By Christopher Stern
Washington Post Staff Writer

Verizon Communications Inc. and other parties have asked a federal court to throw out a set of temporary regulations banning giant regional phone companies from raising the wholesale rates they charge competitors for at least six months.

The legal action comes after the Federal Communications Commission issued the temporary rate freeze on Friday. The rivals, including AT&T Corp. and MCI Inc., have no local network of their own and depend on the regulated rates to offer their own brand of local phone service.

Verizon, along with Qwest Communications International Inc., argued in yesterday’s filing that the six-month delay was little more than an effort by the FCC to avoid implementing an order by the U. S. Court of Appeals for the District of Columbia to scrap the rules. The court found in March that the agency had failed to justify why the rates were necessary in order to promote competition in the local phone business.

The appeals court ruling was the latest defeat for regulations that have been at the center of an intense legal battle for the past eight years.

«It is simply inexcusable for the FCC to flout a binding judicial determination yet again, and to extend those never-lawful requirements for nearly another year,» the regional giants stated in their motion. Also joining the legal brief was the United States Telecom Association, a trade group representing the nation’s four major regional phone companies, often referred to as the Baby Bells because they were formed from the breakup of AT&T, long known as Ma Bell.

FCC spokesman David Fiske declined to comment yesterday on the filing.

Although the rules have been a source of legal controversy since Congress passed the Telecommunications Act of 1996, the latest court decision appears to be a turning point for the industry. In the wake of the March court order, AT&T announced it would no longer market long-distance service to consumers, a dramatic statement by a company that effectively founded the telephone industry in the early part of the 20th century.

In just the past three years, regional phone giants have been able to take millions of customers from long-distance carriers including AT&T and MCI by selling local and long-distance service in a single package. AT&T said that without the ability to offer local service at competitive prices, it could not compete for consumers against the regional phone giants and would instead focus on the business market.

Consumer advocates say the FCC’s former rules promoted competition and helped keep rates down for consumers. When the rivals began offering cut-rate plans including unlimited local and long-distance service, the former Bell companies had no choice but to respond, said Mark Cooper, director of research for the Consumer Federation of America.

The demise of the wholesale discounts for Verizon’s competitors will inevitably lead to rate hikes for consumers. «For the 19 to 20 million [customers of competitors] and the 40 million customers of bundled plans offered by the Bells, they are going to see prices go up. The only question is when,» Cooper said.

In June the Bush administration essentially sealed the fate of the rules when it decided not to appeal the appeals court’s decision to the Supreme Court. As the Bush administration weighed the decision, the four regional phone giants made a voluntary commitment to keep the current rates in place at least through the November presidential election. The regional giants made the commitment after AT&T and other competitors threatened to air advertisements pointing out that any rate hikes would be the result of the Bush administration’s decision to forgo an appeal.

Verizon said it would keep its rates in place until Nov. 11. SBC Communications Inc., BellSouth Corp. and Qwest said they would honor their agreements until the end of the year.

Competitors, including AT&T, say yesterday’s filing was an effort by the regional phone giants to back away from their public commitments to the FCC.

«Obviously, the Bells’ promise that they would freeze wholesale rates was empty. The FCC shouldn’t be surprised that when you play with snakes, you get bitten,» said AT&T spokeswoman Claudia Jones.

In response, Verizon argued that it had to take legal action because the temporary rules extend the rate freeze until at least February and possibly even longer if it fails to put final rules in place by the time the interim regulations expire.

«Now we find ourselves having to join with others in challenging the FCC’s so-called interim rules that extend the illegal status quo with no clear end in sight,» said Michael Glover, Verizon senior vice president and deputy general counsel in a statement e-mailed to reporters.