Competitor UNE rates reduced 41% in New Jersey

In an attempt to promote local competition in New Jersey, the state PUC yesterday set new wholesale rates for competitors that use parts of Verizon Communications’ telephone network to provide local service to customers.

The cost for competitors to lease Verizon facilities to connect customers to local phone network decreased about 41%, from $16.21 to $9.52 per month. In addition, an unbundled network element platform (UNE-P) rate was set at $13.93, 38% lower than the existing $22.42 rate.

Verizon was not keen on the board’s decision.

“We are concerned that the unbundled network element rates ordered today were set at a level designed to artificially stimulate competition, instead of basing them on the established federal pricing formula,” said Bruce Cohen, general counsel of Verizon New Jersey in a written statement.

The decision to set reduced UNE rates was to spur local competition in the area. In addition, the decision is meant to be the basis for a long-term strategy that gives competitive local exchange carriers (CLECs) an incentive to build facilities in the area.

The decision includes reduced non-recurring charges that benefits from the use of modern automated systems and streamlines automation procedures. It also establishes pro-competitive practices so that new services such as DSL can be introduced in the area.

UNE-P availability provides larger facilities-based carriers a strategy to enter the residential local service market. UNE-P lets CLECs access an ILEC’s entire landline customer base without having to buy and install separate equipment in every ILEC central office.

The board set original rates in 1997.

--Amalia D. Parthenios, staff writer