The Wisconsin Public Service Commission (PSC) has completed its mandated annual review under a price-cap plan elected in 1994 by Wisconsin Bell, Inc., saying the company must reduce rates for intraLATA message telecommunications service (MTS) under the price-cap formula. (It noted, however, that Wisconsin Bell had filed a separate application to suspend the price-cap formula for MTS, the only service subject to price changes under the plan.)
The PSC refined operating components of the pricing mechanism, including the company-specific benchmarks for service quality as well as for infrastructure investment and deployment. Using a
3-percent productivity offset against an increase of 2.88 percent in the gross domestic product price index observed during the 1994-95 rate period, the PSC found a price reduction necessary for MTS to maintain a price-cap index of 99.94, as compared to the initial index of 100.
The rate cut includes a penalty for service quality, as well as both incentives and penalties for certain components of the plan's infrastructure investment measures. According to the PSC, company performance in service categories such as average time out of service and repeat trouble calls failed to meet industry standards. Re Wisconsin Bell, Inc., No. 6720-TI-117, March 14, 1996 (Wis.P.S.C.).
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