CHESAPEAKE -- A billing glitch by Cox Virginia Telecom Inc. could leave thousands of Chesapeake residential customers on the hook for hundreds of thousands of dollars.

``All of our local exchange residential telephone customers in Chesapeake were undercharged on their local consumer utility tax,'' said Thom Prevette, a spokesman for Cox Virginia Telecom Inc., a unit of Atlanta-based Cox Communications Inc. ``It's an error in the rate tables.''

The error, which was discovered recently by Cox and corrected in its October bills, concerns a tax that the city requires all local phone companies to charge customers.

The law that mandates the fee, which has been on the city's books for decades, calls for a local consumer utility tax of 25 percent on the first $50 of a monthly bill, up to $12.50.

Somehow internally at Cox, ``25 percent'' became ``25 cents'' somewhere along the line.

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CHESAPEAKE -- A billing glitch by Cox Virginia Telecom Inc. could leave thousands of Chesapeake residential customers on the hook for hundreds of thousands of dollars.

``All of our local exchange residential telephone customers in Chesapeake were undercharged on their local consumer utility tax,'' said Thom Prevette, a spokesman for Cox Virginia Telecom Inc., a unit of Atlanta-based Cox Communications Inc. ``It's an error in the rate tables.''

Cox residential customers in Chesapeake ended up being charged a fraction of the fee they should have been charged.

Frank King, Chesapeake's chief deputy commissioner of the revenue, said the money that was not collected by Cox will still have to be paid.

He said he didn't know who will be responsible for the bill: the company or the customers.

``That would be a business decision that Cox would have to make,'' he said.

Cox Virginia Telecom Inc. has been offering residential service in Chesapeake since February 2000. The billing problem only affects the city's residential customers.

Prevette declined to state how many customers may be affected, citing competitive and proprietary reasons.

However, Mark Cox, Chesapeake's director of public communications -- who has no relationship with Cox Communications -- said the company has about 17,000 residential customers in the city.

The amount of the undercharge could be ``significant,'' he said.

Prevette said the amount will be less than $1 million.

He said that an Oct. 30 meeting is scheduled in Chesapeake, at which top city officials and tax experts from Cox's Atlanta headquarters are expected to resolve any outstanding issues.

Chief among them: Who will have to make up the lost revenue to the city?

``We expect to have that information to present to the public by Oct. 30,'' Prevette said.

The billing problem surfaced at City Hall when Cox customers who called the company to complain about their higher October bills were told that it was due to a city tax.

``We just found out about this,'' Mark Cox said Tuesday.

Chesapeake Treasurer Barbara O. Carraway collects the taxes sent in by local phone companies on a monthly basis -- in the form of checks.

The amounts of the checks are recorded on spreadsheets and the checks are then processed. But it's not the treasurer's function to make sure that the amount received is the amount that is owed, she said.

``That's up to the commissioner of the revenue,'' Carraway said. ``They're the auditing firm.''

King confirmed that the company found the two-year billing error. ``It's something that would've been caught eventually,'' he said. ``It could be caught through an audit process.''

Prevette said the problem began with the start-up of Cox's residential phone service in Chesapeake in early 2000.

``The amount was keyed in at 25 cents per component,'' he said, adding that customers may have been charged 25 cents each for service features such as call-waiting and caller ID.

The company has yet to sort out how much of the tax actually was collected and how much wasn't, he added.

Pilot Online

-- Anonymous, October 16, 2002