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Posted May 30, 2009 | Copyright © The Northern Virginia Daily
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Embarq to lower wholesale rates

RICHMOND -- The State Corporation Commission on Friday directed Embarq to reduce gradually the charges it imposes on other telephone companies to connect to its local network.

The commission found that Embarq's revenue from intrastate access charges represents a subsidy that is inconsistent with the policy established by the General Assembly to promote competition and a level playing field for local phone service in Virginia, and it rejected Embarq's claim that reducing the company's wholesale rates would force it to raise customers' bills to unaffordable levels.

"Embarq has no reasonable basis to claim that access charge reductions as set forth herein force the company to immediately raise retail local exchange rates," the SCC said.

The ruling stems from a complaint originally filed in 2007 by Sprint Nextel.

Embarq, the local phone provider in Warren and Page counties and about half of Rappahannock County, argued that historically its wholesale rates have been set high enough to help cover the costs of providing basic service in rural, high-cost areas of the state.

The initial reduction will occur in two phases to be completed by July 1, 2011, the SCC ruled. The commission determined that the gradual approach will help relieve some of the upward pressure on basic local phone rates paid by Embarq customers.

The SCC directed its staff to monitor any changes in basic local exchange rates during the transition period.

As of Friday evening, Embarq, based in Overland Park, Kan., had not issued a response to the ruling.

-- Daily Staff Report

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