Alaskans Decry Verizon Halt of Calling-Card Use in State
Alaskan regulators want the FCC to investigate Verizon’s plan to stop selling calling cards to Alaskans, and recharging old ones, because service there costs so much. The Regulatory Commission of Alaska said that, before the MCI-Verizon merger, many Alaskans used MCI national calling cards, for 2.9 cents a minute. The cards, now with Verizon’s name, still are offered at that price to most Americans, but not those with Alaskan ZIP codes or phone numbers, the commission said. Verizon now plans to stop recharging old MCI cards on Sept. 4. Recharging the old cards is the only option left for MCI/Verizon users, the regulatory commission said.
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The issue has been simmering since last year, when Verizon proposed to raise the rate in Alaska from 2.9 cents a minute to 35 cents, a move state regulators halted after residents complained, regulators told the FCC.
The Alaskan commission’s letter quoted a July 25 Verizon filing at the FCC that said the company “will no longer permit users of MCI’s Prepaid Phone Cards purchased from Costco stores to recharge their cards using a credit card with an Alaska billing address or by calling to recharge their cards from an Alaskan telephone number.” The MCI cards usually were sold at Costco stores, the regulatory commission said. The state regulators said they oppose the recharging ban because it’s “contrary to the public interest, unduly discriminatory to Alaskans, contrary to federal law and anti- competitive.”
The regulatory commission wants the FCC to “take actions as appropriate to ensure Alaskans are treated fairly and [Verizon] complies with federal law,” it said. “The published MCI rate of 2.9 cents per minute for these cards is the lowest known rate for prepaid cards available to Alaskans,” the commission said. “As MCI cards are no longer sold at Costco, the only ready means Alaskans have to continue using MCI cards is to recharge their existing cards.” The no-recharge policy will make Alaskans “the only American consumers unable to recharge their cards after September 4.”
Federal law bars a carrier “from unreasonably discriminating in its practices or provisions of service based on locality,” the state regulators said. The no- recharge proposal would let Verizon “avoid providing comparable services to rural and high cost areas of Alaska,” the commission said: “It is possible that [Verizon] may argue that it is fair to prohibit Alaskans from recharging their cards given the high cost to serve Alaska in comparison to the 2.9 cent per minute rate offered on the cards. However, by plain reading, federal law intended that consumers benefit from nationwide average rates even if they live in a high cost or rural area,” the regulators told the FCC. Verizon “should not be allowed to avoid its obligations” under the Communications Act “by arguing that Alaska is simply too costly to serve.”
Copies of the filing went to Alaskans in Congress, including Republican Sen. Ted Stevens, ranking minority member of the Senate Commerce Committee.
“We think this is a legitimate request,” said a Verizon spokesman. The company has tried to treat customers in Alaska fairly, he said. Customers can use MCI cards if there are minutes left, and can reload them until Sept. 4, he said: “We just want to exit the business. Companies need flexibility to make changes.”