HELENA, Mont.—Qwest telephone customers should get lower bills through monthly credits of $2 to nearly $11 next year, because of money the federal government gives the telecommunications company to subsidize service in suburban areas, an analyst told Montana utility commissioners.
The state Public Service Commission, which regulates utilities, hired Larry Blank as part of an investigation into Qwest’s use of federal “universal service funds.” The money is paid to telephone companies serving suburban and semi-rural areas.
Blank said the commission should require that Denver-based Qwest give customers the credits he proposed.
The federal dollars are intended to subsidize the higher cost of telephone service in those places and should be used to make rates for suburban and semi-rural customers equivalent to rates in urban areas, Blank said.
He presented the credit idea, in testimony filed with the PSC this week, as a way to help equalize phone rates throughout Montana.
The PSC has been investigating Qwest’s use of millions of dollars in universal service funds.
Qwest has until July 19 to file its initial testimony in the case. The PSC plans a hearing in September.
On Wednesday the company declined to respond directly to Blank’s position that Qwest should pass the federal funds through to customers.
“Our first priority is serving our customers,” Qwest spokeswoman Jennifer Barton said in a prepared statement. “We look forward to working diligently with the Public Service Commission on a plan that does just that: Serve our Montana customers.”
Qwest has about 300,000 customers in the state.
Blank said Qwest should give directly to Montana customers the $16.2 million the company received last year in federal universal service funds for the state, plus $1.3 million in interest earned on that money.
July 1 should be the starting date for the money to be distributed as a monthly credit on customers’ bills, he said, and customers paying higher rates because they are farther from cities should get higher credits.
Under Blank’s proposal, Qwest’s urban telephone customers would get credits, as well.
He disputed Qwest’s contention that the revenue is taxable income and that only 61 percent of the money actually flows to the company. Blank said that if the money is used for customer credit, then it is not taxable and the entire sum can go to customers.
