Administrative law judge (ALJ) for Pa. PUC recommended agency rej...
Administrative law judge (ALJ) for Pa. PUC recommended agency reject all alternatives to full structural separation proposed by Verizon and other parties. In recommended decision Fri., he urged PUC to implement within 12 months its Sept. 1999 decision to…
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split Verizon (formerly Bell Atlantic) into separate retail and wholesale business operations. ALJ Wayne Weismandel said PUC in April gave Verizon opportunity to provide detailed proposal for structural separation, with cost analysis, but company used ensuing 8 months to try to convince agency that full structural separation would be prohibitively expensive and cause massive confusion in both retail and wholesale markets, without attempting to describe specific problem elements or proposing how those problems might be mitigated in separation plan. He said Verizon also used time to promote “unacceptable” alternative of splitting off just its advanced digital and high-speed Internet access services. Weismandel said Verizon’s alternative was mere line-of- business split that “didn’t mitigate the anticompetitive impact of Verizon’s dominant market power over its base of legacy monopoly customers,” which he said was driving force behind PUC’s separation order. He said other alternative proposals put forth by various parties couldn’t be evaluated because they lacked any cost study or analysis. He said PUC would need to address key policy issues raised in other alternative proposals, including retail unit’s universal service responsibilities, whether retail unit should have significant independent minority shareholder interests, how migration of existing Verizon customers to retail affiliate should be handled. He said case record compiled to date offered little, if any, guidance for addressing those issues. Weismandel urged PUC to reject all alternative proposals to full separation, give Verizon one year to complete structural separation, and require company within 30 days to file detailed transition program. Verizon said ALJ was wrong in dismissing its “compelling” evidence of prohibitive costs and market chaos from structural separation, and resulting harm to wholesale and retail customers. Verizon Pa. Pres. Daniel Whelan said structural separation of Verizon’s Pa. operation could have dire consequences for Pa. telecom markets, as 1996 structural separation of Cal. electric utilities was having in current Cal. energy market.