Qwest deregulation plea draws fire
By Jeff Smith
Rocky Mountain News
Thursday, July 17, 2008
Residential and business price hikes undermine Qwest's plea for
deregulation in the metro area, the
Office of Consumer Counsel argued this week.
"They argue there is an effectively competitive market here in
the Denver (area), yet at the
same time . . . they're requesting for all kinds of rate
increases," said Jim Greenwood, director of the Colorado Office
of Consumer Counsel.
Qwest Communications has asked the Federal Communications
Commission for wholesale rate relief in
Denver, Phoenix, Minneapolis and Seattle, saying robust
competition exists in those markets. The Denver telco added in a July 3 letter to the
FCC that competition acts to "discipline" rate increases.
The state's consumer watchdog group reacted strongly to that
argument in a letter to the FCC on Tuesday reiterating its
opposition to Qwest's petition.
"The bottom line, quite simply, is that the alleged 'sufficient'
competition is not currently constraining Qwest from raising
rates in the Denver (area)," wrote Gregory Bunker, assistant attorney
general for Colorado.
The FCC has to decide on Qwest's petition by July 26. The
current wholesale rate structure enables other telcos to lease
pieces of Qwest's network at set prices so they can offer
Steve Davis, Qwest's senior vice president of public policy,
said, "Prices in communications services over the last 10 years
have been either down or flat."
Davis added that
even in a competitive market, "sometimes prices do increase" as
a result of inflation, a company's revenue picture, and the
overall cost of doing business.
Telco's price hikes
* Monday, Qwest gave notice it will increase price caps
for selected business products and services effective Aug. 15.
* July 1, Qwest raised the rates of 44 a la carte
services and products - such as caller ID and call forwarding -
by 7 percent to 28 percent.
* Earlier this year, Qwest increased some Internet
services by as much as 11 percent, and supported legislation
that would have allowed the telco to hike the basic residential
phone rate by as much as 32 percent. Lawmakers didn't go for
the rate hike, but the basic rate will be reviewed by state