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GTE FLORIDA FILES PETITION TO LOWER SOME RATES AND RAISE OTHERS BEGINNING 1993; FIRST RATE REVIEW SINCE 1981

 GTE FLORIDA FILES PETITION TO LOWER SOME RATES AND RAISE OTHERS
 BEGINNING 1993; FIRST RATE REVIEW SINCE 1981
 TAMPA, Fla., May 1 /PRNewswire/ -- GTE Florida today asked the Florida Public Service Commission (FPSC) for approval to change rates. Why? To cover increasing costs, to address customer demands for lower toll rates and local calling plans and to position GTE Florida for increased competition. The overall increase sought is $111 million. Any approved rates will take effect in early 1993. This is GTE's first request to increase local rates since 1981.
 Key components of proposed rates include:
 -- Reducing toll rates, including a 33 percent reduction in day-
 time toll rates.
 -- Reducing prices by 60 percent for all in-county calls within
 GTE Florida's service area that are currently toll calls.(A)
 Where a switching center serves telephone numbers in more than
 one county, customers served by that center will be able to
 call each county at the reduced rate.
 -- Reducing prices by 60 percent for the following routes: (A)
 -- Tampa to/from Hudson, Mulberry, New Port Richey and
 Zephyrhills;
 -- Clearwater to/from New Port Richey;
 (A) Routes will be converted to Extended Calling Service (ECS). ECS residential rates are 25 cents per call. ECS business rates are 4 cents per call plus 6 cents per minute.
 -- Zephyrills to/from Plant City and Tarpon Springs;
 -- Mulberry to/from Plant City;
 -- Palmetto to/from Sarasota.
 -- Reducing access charges paid by long-distance carriers (which should mean long-distance savings for GTE Florida customers).
 -- Increasing average monthly basic local service charges for residential customers by approximately $5 (from $11.35 to $16.64) and for business customers by approximately $20 (from $29.11 to $48.87).
 -- Increasing rates for other optional services, including some SmartCallsm Services, non-published and non-listed telephone numbers, operator-assisted long-distance calls, Message Rate Service and Seasonal Service.
 Basic Rates Unchanged for More Than a Decade
 "Cost reductions and growth in the company's service area have enabled GTE to keep basic service rates consistent for 11 years," said Peter A. Daks, regional vice president-general manager. "Now growth has slowed and competition is increasing, becoming more of a factor in pricing services. In addition, three major items will increase GTE Florida's costs in 1993 -- new accounting rules for post-employment benefit costs, Federal Communications Commission rules for allocating costs and increased depreciation expenses associated with advanced technology installed to improve quality and reliability and to lower costs in the long run."
 GTE's efforts to minimize increases in its operating expenses while enhancing quality and reliability of service include the use of advanced technology and working more efficiently. GTE Florida has invested approximately $3.1 billion in capital improvements since 1981 to improve voice and data transmission quality and reliability and to control operating costs long-term. As a result, 1991 operating expenses were actually less than those in 1988, adjusted for growth and inflation. In fact, the company reduced operating costs per line by approximately 12 percent between 1988 and 1991.
 Conditions Changing in 1993
 Despite these efforts to reduce costs, as well as a reduced work force, with the slower growth in revenues, today's rates will not cover projected 1993 costs. The three primary factors forcing GTE Florida to seek additional revenue are:
 -- Financial Accounting Standards Board rules for post-employment
 benefit costs have changed, requiring all large, publicly owned
 companies in the United States to account for those future
 costs while workers are actively employed.
 -- Federal Communications Commission rules require GTE Florida to
 shift the recovery of additional costs for equipment and
 operations from calls between states to calls within the state.
 -- Increased depreciation expenses. Technology developments are
 requiring the company to continually modernize its network,
 replacing equipment faster, which increases depreciation
 expenses.
 Many of the services provided by GTE Florida are now subject to competition. Examples of competitive alternatives include: operator services, coin telephone service, long-distance service, cellular telephone networks, satellite networks and links to long-distance carriers. Competitors, who are either not regulated or lightly regulated, have greater flexibility in pricing their products. GTE Florida's proposed lower toll and access rates are designed to more effectively meet the ongoing needs of our customers in a competitive environment, and as a result, help ensure that basic local service can be offered at the lowest possible price.
 Since the start of competition in long-distance service, the company has lowered the rates it charges long-distance carriers by 27 percent. The lower charges have helped the carriers reduce their prices. GTE's proposed rates should mean even more long-distance savings.
 Public hearings on GTE Florida's rate review will be held late this summer in the company's service territory. A decision is expected in December. Any rate changes approved would be effective early in 1993.
 -0- 5/1/92 R
 /CONTACT: Jan Morris, 800-282-7751, (813-254-7529, evening), or Jim Marzano, 800-282-7751, (813-881-9056, evening), both of GTE/ CO: GTE ST: Florida IN: TLS SU:


JB-AW-SS -- FL009 -- 5534 05/01/92 14:22 EDT
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Publication:PR Newswire
Date:May 1, 1992
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