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SNET PROPOSES NEW TELECOMMUNICATIONS INITIATIVES TO SUPPORT ECONOMIC DEVELOPMENT

 SNET PROPOSES NEW TELECOMMUNICATIONS INITIATIVES
 TO SUPPORT ECONOMIC DEVELOPMENT
 NEW HAVEN, Conn., Oct. 13 /PRNewswire/ -- In response to a far- reaching Department of Public Utility Control inquiry designed to shape the future of telecommunications in Connecticut, SNET (NYSE: SNG) today gave notice of its intent to file a plan to phase in rate changes over a three-year period. The new rates will provide SNET with the ability to continue to make essential investments in the telecommunications infrastructure that is increasingly critical to Connecticut's economic development and quality of life.
 "Our state needs a telecommunications infrastructure that will help strengthen Connecticut's economy, produce jobs and enhance the quality of life for people in our state," said Walter H. Monteith, SNET chairman and chief executive officer. "The challenge is to look beyond today and put in place those changes that will enable Connecticut to attract and maintain businesses in our increasingly information reliant economy. SNET's telecommunications infrastructure is an essential part of the foundation for tomorrow's economy and investment in it must be encouraged."
 SNET is placing before the DPUC a package of interrelated proposals -- which when implemented simultaneously -- will help position Connecticut to benefit from the opportunities of the Information Age.
 Because increases will be proposed for some rates, SNET is required to inform state and municipal officials of its intent to seek higher rates today.
 This package of proposals will be considered by the DPUC during a comprehensive review of local telephone companies' plans for the telecommunications infrastructure that reaches all Connecticut's households and workplaces, intrastate competition, regulatory reform, rate restructuring and the telephone exchange structure. The DPUC will also review SNET's financial condition and service rates.
 The DPUC commissioned an independent consulting group to examine and evaluate the telecommunications environmment in Connecticut and recommend any changes necessary to make sure that Connecticut is well positioned for the future. This firm, the TELA Group, issued a report in September which recommends accelerating infrastructure development.
 Walter Monteith and Dan Miglio, SNET president and chief operating officer, will testify before the DPUC when the hearings begin on Oct. 19.
 On Nov. 12, SNET will propose a rate restructuring which will include geographically-based rate plans and allow customers to pick the one that best meets their local calling needs. This would mean higher rates for those customers who choose the largest local calling areas, but smaller or no increases for those customers selecting reduced local calling areas.
 Our proposal will also call for closing the gap between business and residential rates to help make Connecticut businesses more competitive and keep jobs in the state. To ensure that universal service is preserved, SNET will propose lifeline service which would be available based on demonstrated need.
 Other portions of the proposed restructuring will include reduced charges for some in-state long distance calls, an increase in the coin phone rate from 10 cents to 25 cents, and an increase for directory assistance charges from 24 cents to 40 cents combined with a reduction in free residence directory assistance calls.
 SNET will propose a three-year transition plan with rate increases in the first year to compensate for SNET's significant underearnings and the initial acceleration of the infrastructure investment. Rate increases in the subsequent years will provide for capital recovery and the balance of the accelerated infrastructure investment. If approved, rate changes will be phased in over a three-year period and would not be reflected in customer bills until the second half of 1993.
 "This package provides a path for Connecticut to follow in developing an infrastructure which will provide the emerging Information Age services that are crucial to economic development, to retaining and attracting business, to jobs and to the quality of life in our state," said Monteith. "It is essential that all the interrelated parts of the package be put in place quickly and at the same time."
 The amended rate schedule is designed to increase SNET's instate revenues by approximately $60 million in the first year, with an additional $35 million in the second and third years for a total of $130 million. However, if SNET's financial health continues to deteriorate, the total amount needed could be as much as $160 million.
 Because SNET plans to propose a new method of structuring monthly service charges to give customers more choice over the amount they pay, projections on just how much any customer's bill may change are not available at this time. For some customers electing the largest extended local calling option there will be increases in local monthly charges while for other customers there may be decreases. All customers will have more options and therefore more control over the level of their monthly bills.
 -0- 10/13/92 R
 /CONTACT: Bill Seekamp of SNET, (203) 771-4662/
 (SNG) CO: Southern New England Telecommunications ST: Connecticut IN: TEL SU:


PS -- NE014 -- 9484 10/13/92 16:18 EDT
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Date:Oct 13, 1992
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