Colorado has approved a deregulation of Qwest’s phone business that will allow the company to better compete, but it could mean price increases.
The first line into a home will remain capped by law at a base price of $15 a month, along with a similar base price limit of $35 a month for each of the first five lines into a business.
But in the Denver metro area and most of Colorado Springs, where ample competition exists, Qwest will be free to set prices on nearly every other service it offers, including voice mail, call waiting and caller ID.
The decision by the state Public Utilities Commission on Monday also frees Qwest from red tape and the requirement of giving competitors a 30-day advance notice for new packages or prices.
“This now eliminates all the burdensome cost studies and filing requirements but changes the notice requirements to one day,” said Steve Davis, Qwest’s senior vice president for public policy. “This helps Qwest and its customers.”
Qwest says deregulation is key to its survival. The Denver- based phone company, and other regional Bells, continue to lose phone customers to a growing number of wireless, cable and Internet phone competitors.
Qwest has persuaded eight of the states in its 14-state Midwestern and Western service territory to at least partially lift price controls. Colorado would be the ninth.
“This settlement is a sensible, modest step towards less regulation,” said PUC chairman Greg Sopkin. “(This) recognizes the reality of today’s competition – that most consumers have a choice of wire-line, cable, wireless and Internet modes of competition.”
The PUC staff negotiated the settlement along with Qwest and the Office of Consumer Council, a consumer watchdog.
But AARP, a nonprofit retirees advocacy group, called the decision “a loss for Colorado consumers.”
“Qwest was allowed a rate increase of approximately $12 million to $13 million (and) a reduction of the oversight of Qwest by the PUC,” said AARP spokeswoman Maureen Pierce. “We remain concerned that rural Coloradans will see rate increases with limited competition.”
Under the settlement, Qwest will no longer be required to provide residential and business customers a monthly credit related to a legal settlement the PUC reached with US West, now Qwest, in the mid-1990s. It adds up to $6 a year per home line and $12 per business line.
That means phone bills will likely increase by this amount, AARP says, though Qwest says the money will be used to reduce access costs that Qwest charges long-distance companies. That means long-distance rates should decline, Qwest says.
Davis said there have been no complaints of price hikes so far in any of the states where deregulation has been approved.
“Can prices go up? They can. But what we have seen in this industry is declining prices,” he said.
Several of Qwest’s telecom competitors, including MCI and AT&T, support the settlement.
“This will make Qwest a stronger competitor, but I don’t necessarily think that is a bad thing,” said Jawaid Bazyar, president of Denver-based foreThought.net, which uses Qwest’s network to sell phone and high-speed Internet.
Most regulations would remain in areas outside the Denver metro area and Colorado Springs, where there are few competitive options to Qwest. Also, the PUC retains the right to re-impose regulation over all Qwest services, except long-distance, if problems arise.
In Monday’s deliberations, the PUC changed a dozen minor points in the settlement and now will issue a written approval by June 28, PUC spokesman Terry Bote said. Deregulation will go into effect within 90 days, according to the PUC.
Staff writer Ross Wehner can be reached at 303-820-1503 or rwehner@denverpost.com.
Case study: Remy Corp.
The background: Andrew Albarelle, principal executive officer of Remy Corp., a Denver-based staffing firm
The past: Albarelle dropped Qwest shortly after founding Remy in 1999. “We saw the level of service and prices weren’t going to be acceptable,” he said. Albarelle instead signed up XO Communications to supply 210 phone lines and high-speed Internet.
The future: “Whenever you streamline something, you are making it cheaper,” Albarelle said. “This should benefit Qwest.” Will Albarelle consider Qwest? “Maybe.”
ROSS WEHNER
