Telecommunications

Today's telephone marketplace is highly complex, encompassing a wide variety of services and, for some services, many potential service providers. In Vermont, well over a hundred companies have been authorized by the Public Service Board to provide local telephone service (though many companies are not actively marketing service), and hundreds more are authorized to provide long distance service within the state. Changing technology is bringing further options in the form of wireless service and Voice over Internet Protocol (VoIP), which provides a voice communications service similar to telephone service via a broadband internet connection.

All companies that offer telecommunications service in Vermont must obtain a certificate of public good from the Public Service Board. These companies include cellular service providers, although federal law does not allow the PSB to deny these companies authority to offer service.

All companies, except the cellular carriers, are presently required to file and obtain the PSB's approval for their "tariffs," which describe all of the intrastate telecommunications services the company offers, and the prices, terms and conditions on which those services are offered. One purpose of these tariffs is to assure that companies are not unreasonably discriminating among customers or potential customers. Another purpose of the tariffs, at least for companies that do not face intense competition, is to assure that their prices are not excessive. Chief among such companies are the local phone companies that, traditionally, held monopolies over telephone services in their respective service areas.

The largest local phone company, Verizon, which serves about 85 percent of the state, is subject to an "incentive regulation" plan that allows it to introduce and change the prices of new services, but limits its ability to increase prices of pre-existing services. The rates of Vermont's nine "independent telephone companies," which serve about 15 percent of the state, continue to be set on the basis of these companies' overall cost of providing service.

The competitive local exchange carriers and the toll providers are subject to review of tariffs but their prices are presumed to be reasonable due to their non-dominant position in the markets. Federal law allows the PSB to consider whether the terms of service offered by wireless carriers are clear and reasonable, but does not allow the PSB to establish limit on cellular service prices. Finally, at present, the FCC has at least partially preempted state regulation of cable modem service and VOIP and some issues of regulation of these new technologies remain uncertain.

From this section of the Department of Public Service website, users can access information about the companies doing business in Vermont, a wealth of statistical information about Vermont's telecommunications landscape, and information about the Vermont Universal Service Fund.

For more information on the role of DPS in telecommunications regulation, visit the Telecommunications Division page.