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Va. Corp. Commission approved price cap regulation plan for Veriz...

Va. Corp. Commission approved price cap regulation plan for Verizon South (formerly GTE) that replaces indexed rate-of-return system in place since 1995. Under new cap system, approved Thurs. with effective date Mon., carrier’s basic exchange rates are frozen through…

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2003. Rates for other noncompetitive services are under caps indexed to 50% of gross domestic product price index, with annual adjustments. Competitive services are flexibly priced. Carrier won’t be allowed any rate increases if it fails to meet state service quality standards. Earnings aren’t regulated. Plan for state’s 2nd largest incumbent telco is similar to plans for other large Va. incumbents. Commission in mid-Dec. paved way for adoption of price caps by approving settlement providing for $200 million refund to customers of overearnings under previous earnings-based plan.