NRRI 79-X TOWARD AN ANALYSIS OF TELEPHONE LICENSE CONTRACTS AND MEASURED RATES


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Create Date January 1, 1979
Last Updated August 6, 2018
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By

Allen G. Buckalew
Associate Director for Telecommunications

Daniel Z. Czamanski
Assistant Professor of City and Regional Planning

Karl A. McDermott
Senior Research Associate

This report has been compiled in response to a request by The Maryland Public Service Commission to provide technical consultant services in rate case number 7305. After an initial meeting, on May 22, 1979, with several of the Maryland Commissioners it was determined that NRRI would focus on two issues. These issues were measured use rate structures and the license contract expenses. The following report analyzes the material presented by the telephone company in the two areas.
In the area of measured service rates we found that the proposed rates were not supported by cost data. We discussed the economic implementation and theory for measured service rates and concluded that rates must be related to costs. Additionally we raise a number of questions with respect to the cost data provided and the proposed rate structure.
In the area of license contracts we have again found no cost support for the expenses. In addition the C&P Telephone Company of Maryland has not explained how the total license contract costs are allocated to specific services. We have again raised several questions; these questions address the license contract in general, specif'ic license contract expenses and the benefits associated with license contract expenses.
It was our intention of this report to provide some insight and raise several questions -in the two subject areas so that the t1aryland Public Service Commission could determine the justness and reasonableness of the proposed rates~

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