Rate hike spawns U.S. West debate



    U S West announced Tuesday that it plans to raise basic residential telephone charges to generate an additional $73 million a year in revenue.

    The $9-per-month increase would hike the cost of telephone service for all U S West residential customers from about $15 to $24 per month.

    Making its case before the Utah State Public Service Commission Monday, the company based its request on several factors, including its investment to keep up with Utah’s population growth.

    According to an Associated Press report, the demand for telecommunications services prompted the proposed rate hike.

    “There’s a huge demand for telecommunications services in Utah,” said Duane Cooke, U S West spokesman, in an interview with the Associated Press. “In order to keep up with that demand, we will continue to make huge investments in this state.”

    Cooke also said highly subsidized residential rates should be increased, because emerging competitors are vying only for business customers.

    “You can’t make any money the way the rates are now,” Cooke said.

    Both the Utah State Division of Public Utilities and the Utah Consumer Services Committee, which both oppose the rate hike, made recommendations to the PSC to reduce the proposed $71 million increase to $63.5 million and $39.4 million respectively.

    Phil Bullock, economist for the Utah State Consumer Services Committee, said the U S West claims are false.

    “Their claim that residential rates are subsidized and underpriced is not true,” Bullock said.

    “We are a consumer advocate for the public,” Bullock said of the CSC. “Since U S West has the monopoly on residential telecommunications, their customers have no choice when it comes to rate increases — they are captive customers. The basic customer must be protected.”

    Bullock also disagrees with U S West’s angle that increasing residential telecommunication rates will promote competition between telephone companies who do not currently seek residential clients.

    “I’m not anti-business,” Bullock said. “But when they say they want to increase rates so other companies will come in and take their business, I don’t believe it.”

    According to Bullock, the four-week PSC hearing is composed of two parts. The first two weeks are spent filing thousands of documents and hearing testimony from numerous witnesses to decide how much additional revenue U S West needs. After a week break, the hearing will reconvene to decide where the money will come from, meaning which customers will be affected.

    Bullock said that since the public is either the winner or the loser in this issue, the public may attend Public Witness Day, Oct. 2, at 9 a.m. in the Main Hearing Room, 4th floor, 160 E. 300 South in Salt Lake City. Anyone interested in testifying before the Public Service Commission can do so. The PSC will provide an attorney for the public witnesses.

    But even after all the papers and testimonies, the case may not be decided.

    “When the Committee, (the jury) makes a decision, any party who is not happy with the verdict can appeal the case to the Utah Supreme Court,” Bullock said.

    “That can take a lot of time,” he said.

    Various telecommunications companies such as AT&T and MCI have teamed up with the USDPU and the USCSC to debate the increase.

    The rate hike proposal comes almost jointly with a U S West announcement to contribute approximately $80 million in cash and services to the 2002 Winter Olympics. Cooke says the sponsorship is not a factor in the rate request.

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