20030818_593.pdf

DECISION MEMORANDUM
TO:COMMISSIONER KJELLANDER
COMMISSIONER SMITH
COMMISSIONER HANSEN
COMMISSION SECRETARY
COMMISSION STAFF
LEGAL
WORKING FILE
FROM:BEVERLY BARKER
DATE:AUGUST 15, 2003
RE:VERIZON REPORT & REQUEST FOR CONTINUING WAIVER
CASE NO. VZN-01-
V erizon' s billing system cannot accommodate customers ' request to allocate partial
payments in a way that differs from its automatic processes. This inability to manually allocate
payments as directed by customers causes Verizon to be out of compliance with Rules 306.
and 312.03 of the Telephone Customer Relations Rules (TCRR). In June 2001 , Verizon
requested a temporary exemption from the rules, stating that the Company was considering
modifying or replacing its billing system and did not find it cost-effective or advisable to modify
its current system. In Order No. 28857, Case No. VZN-01-, the Commission granted
Verizon s request, giving the Company a two-year exemption, which expires on September 19
2003. The Company was further ordered to report back to the Commission on its progress
towards being able to comply with the TCRR.
Staff and Company began discussions earlier this summer regarding this issue. Staff
reviewed complaints it had received from Verizon s customers since September 2001. During
this period, the Commission had received no complaints specifically about allocation of
payments, but a few complaints touched on the issue tangentially. Verizon agreed to modify its
automatic allocation system so that partial payments will first be applied to all amounts due for
local exchange service. This modification will guarantee that customers will not lose local
exchange service as long as a customer s payment is sufficient to cover charges for that service.
Based on Staff s review of complaints, the system modification, coupled with procedures in
DECISION MEMORANDUM - 1 -AUGUST 15 2003
place to address customers' billing disputes and payment allocation issues , will be an adequate
interim solution to the company s billing system problem. However, Staff continues to believe
that allowing customers to direct how their payments will be allocated as required by the
Commission s rules is the best course of action.
On August 5, 2003, the Commission received a letter from the Company (attached)
indicating that Verizon "has put any major system modifications on hold". The Company
maintains that making the necessary changes to the existing billing system to allow for customer-
directed payment allocation remains cost-prohibitive. Therefore, the Company requests that the
waiver continue to remain in place indefinitely until such time as the Company undertakes a
major upgrade of its billing system.
STAFF RECOMMENDATION
Staff recommends that the Company be granted a continuing exemption from Rules
306.06 and 312.03 until such time as the Company either replaces its current billing system or
undertakes major modifications of its billing system. Staff also recommends that the Company
be required to file a report with the Commission regarding the status of its billing system if the
Company has not made such changes by September 19 2006.
COMMISSION DECISION
Does the Commission wish to grant Verizon s request for a continuation of its exemption
from Rules 306.06 and 321.03 until such time as the Company either replaces its current billing
system or undertakes major modifications of its billing system?
Does the Commission wish to require Verizon to file a report with the Commission
regarding the status of its billing system if the Company has not made such changes by
September 19, 2006?
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DECISION MEMORANDUM - 2 -AUGUST 15 2003
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17933 N.W Evergreen Pkwy
PO, Box 1100
Beaverton, OR 97076
Jean Jewell
Commission Secretary
Idaho Public Utilities Commission
472 W. Washington
Boise, Idaho
RE: VZN- T -01-
Dear Ms. Jewell
The Idaho Commission granted Verizon a waiver ttom the Commission s partial payment
application rules in Docket VZN-01-8. Order 28857 directs Verizon to advise the
Commission on its progress towards meeting the requirements of the rules (ill AP A
31.41.01 306.06 and 312.03) no later than September 19, 2003.
Verizon had advised Staff in 200 I that the company was in the process of reviewing its
billing system and may decide to upgrade the billing system as a result of the GTE/Bell
Atlantic Merger, As a result of the downturn in the telecommunications industry, the
Company has put any major system modifications on hold.
Verizon estimates that it would cost the company in excess of $2 Million to modify the
current billing system to allow the company to manually apply partial payments to
specific services or billing buckets as directed by the customer. Many systems and
processes would need to be adjusted. A detailed description of needed system changes
was provided to Staff in April.
In order to avoid customer complaints and to meet the spirit of the rule, which is to
protect local service, Verizon changed its payment allocation method to Option 7
effective May 1 , 2003, Payments are now allocated to past-due basic and current basic
before moving to the other service buckets instead of the old Option 6 that allocated
payments to past due basic and didn't pick up current basic until all past due buckets
were paid.
In addition, Verizon complies with IPUC Customer Relations rules 205 and 401(2) that
require the company to remove disputed charges from a customer s bill within two billing
cycles. This will further protect basic service for disputed charges.
To the company s knowledge, there have been no new complaints that can be directly
attributed to Verizon not being able to manually direct partial payments per the
customer s request. The Company has been able to resolve any customer issues by
changing the payment allocation method, recoursing or crediting unauthorized charges
and extending payment arrangements when necessary.
Verizon respectfully requests that the waiver continue to remain in place for an indefinite
period of time. Should the Company undertake a major upgrade of the billing system that
could incorporate the systems changes necessary to be in compliance with the Idaho
Commission s partial payment rules, the Company will notify Staff and the Commission,
Please feel ttee to contact me at [phone] if you have any questions.
Sincerely,
!Jf1i
Authorized Representative for
Verizon Northwest Inc.
c: Beverly Barker
Director - IPUC Consumer Assistance