AUSWR
The Association of U S West Retirees
 

 

 

Qwest opposes state's control
Phone company wants law loosened to allow it to raise basic rate
By Kimberly S. Johnson
Denver Post
Tuesday, April 8, 2008

In the face of increasing competition, Qwest is looking to loosen the control the state has over basic residential phone rates.

The Denver-based telecommunications company wants to change the formula used to establish the rate, said Chuck Ward, president of Qwest's Colorado division.

"In Colorado, the price is constrained by statute," Ward said Monday in a meeting with The Denver Post.  "The price is the same as it was in 1995."

Currently, that rate is $14.88 a month.

While Qwest can increase the rate up to 5 percent a year, the formula for doing so is based on inflation minus productivity gains that make service less expensive to provide.

Doug Dean, state Public Utilities Commission director, said Qwest has not applied for a rate increase since 1995.  Keeping the rate at its current base price is part of a sunset bill HB 1227 that seeks to reauthorize the PUC until 2019.

Qwest is looking to amend the sunset bill, eliminating the productivity formula and instead basing possible rate increases solely on inflation.  State Sen. Lois Tochtrop, D-Thornton, is sponsoring the amendment, set to be introduced in the Senate sometime next week.

According to Dean, Qwest wants to be allowed to retroactively apply the inflation rate over the last 10 years, which could take the base price of residential service to $19.61 a month, a 32 percent increase.

Ward said even if Qwest got a change to the law, it wouldn't necessarily raise the rate to $19.61.

Colorado is one of only two states in which the residential rate is set in statute.  South Dakota, where Qwest also offers service, is the other.

"This is an environment where regulation is contradictory and harmful," Ward said.  "It preserves the assumption that there isn't competition in the marketplace."

The PUC is fighting the amendment, saying it's a "raw deal" for consumers.

Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com

http://www.denverpost.com/business/ci_8844631