Qwest risking rebates, N.M. panel says
By Associated Press
Rocky Mountain News
Wednesday, March 9, 2005

SANTA FE - State regulators said Tuesday that Qwest Communications is falling behind on a requirement to invest in telecommunications infrastructure in New Mexico and must catch up or risk having to return money to customers.

The Public Regulation Commission, in an unanimous ruling, said Denver-based Qwest hasn't complied with a 2001 order that requires the company to invest $788 million and improve its infrastructure in New Mexico between 2001 and 2006.  Qwest will have a shortfall of about $200 million and perhaps more by the August 2006 deadline if the company's current spending trend continues, commissioners estimated.

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The commission ruled that if Qwest fails to invest what is required, the shortfall must be credited or refunded to its customers.  Commissioners said, however, they would prefer Qwest to make the required infrastructure improvements and investments in rural telecommunications.

Qwest New Mexico President Loretta Armenta said the company obviously was disappointed with the decision "because we feel we have a good track record" in New Mexico.  Armenta didn't rule out an appeal but said the company would sit down with regulators to discuss how to proceed.

Qwest had asked state regulators last year to reconsider the investment amount or extend the time period because of changes in the telecommunications industry.

But the company provided no persuasive arguments why the investments should be waived or reduced, Commission Chairman Ben Ray Lujan said Tuesday.  The commission also ruled that Qwest must file quarterly reports, starting in May, that detail how it will comply with the investment commitment.  The commission also called for an independent audit of the investments.

A half-dozen groups testified late last year that the company should be held to a commitment to improve New Mexico's telecommunications systems.  Those groups included the commission staff, the state attorney general's office, the New Mexico Internet Professionals Association, the General Services Department, the federal Defense Department and Citizens for Integrity and Transparency in Utility Matters.

Staff writer Jeff Smith contributed to this report.