Merger settlement means savings for Verizon phone customers

SPRINGFIELD, Ill. -- Verizon customers could have a little extra spending money starting this summer.

The phone company, the Citizens Utility Board and state officials announced Thursday a settlement that eventually would save 850,000 Illinois Verizon customers more than $25 million a year.

Under the settlement, the average residential customer would see rate cuts of $150 or more over the next five years, and businesses would save more than $90.

The rate cut is the final piece of a settlement stemming from the 1998 merger of GTE and Bell Atlantic that formed Verizon. The settlement must still be approved by the Illinois Commerce Commission, and that could happen later this month.

Verizon and CUB, a consumer watchdog group, said the settlement gives consumers immediate savings and avoids lengthy litigation.

"We think it's a fair deal, a good deal and one that customers will benefit from," CUB executive director Martin Cohen said at a Statehouse news conference.

Verizon was supposed to outline for the Commerce Commission next month its plans to reduce local phone rates as a result of savings the company made from the merger.

Instead, the company agreed with CUB and the attorney general's office to settle the case beforehand. That avoids a costly case before the ICC that could have delayed consumer benefits for a year or more, both sides said.

"This settlement gives Verizon customers in Illinois immediate benefits," company executive James Hargrave said in a statement.

Verizon serves most of rural Illinois, covering outlying areas around the state's largest cities, which are SBC territory. The company serves about 20 percent of the state's population but about 75 percent of its land, spokeswoman Tracy Stolle said.

The savings would come in three phases, with the first and largest coming June 1. Overall, residential Verizon customers would see their bills drop 10 percent over the five years, and savings would be on local calls within town and those in the extended service area.

The company also has promised not to ask for a general rate increase during the length of the agreement.