Circling the Wagons

Consumer groups are banding together to fight off US West's rate hikes.

US West likes to highlight the diversity of its huge fourteen-state territory with TV advertising that periodically features cowboys chatting on pay phones and pickup trucks rambling through the Sonoran desert. Now the phone company's opponents have picked up on the Western theme: They've formed a regional posse to hunt down any and all rate hikes sought by US West.

"We have to credit our friends at US West for spurring this on," says Chuck Malick, legislative director for the Colorado Public Interest Research Group (CoPIRG). "They've been aggressively campaigning throughout their territory to raise residential rates."

The US West Territory Consumer Watch includes CoPIRG, the Colorado chapter of the American Association of Retired Persons, and citizen groups in Arizona, Oregon, Washington and Minnesota. What brought these groups together is US West's ongoing push to raise the cost of phone service. The company has made it clear that it wants to hike residential rates in most of the states it serves. In Colorado, US West has asked the Public Utilities Commission to approve a 20 percent increase in residential phone charges.

The members of the consumer coalition will track all regulatory and legislative action affecting US West in their home states and alert one another and the public about the phone company's tactics. They're also asking US West and other companies providing local phone service to sign a pledge to offer consumers lower rates, more competition and reliable service.

By working together, the consumer groups believe they can more effectively challenge a multi-billion-dollar corporation that lavishes funds on lobbying and public relations.

Malick says Citizen Action, a national group based in Washington, D.C., that has several chapters around the country, first suggested that the consumer groups in the region band together to take on US West. "It sounded like a good idea to us," he says.

In several states, the coalition already has unofficial allies: the utility-commission staffs, which often recommend that rate hikes be rejected. In Colorado, the staff of the PUC has recommended that the proposed rate hike be denied. The commissioners are expected to rule on the request later this winter. If Colorado denies US West its rate hike, it will join Washington, Arizona and Iowa in rejecting the phone company's requests.

US West insists that it loses money on residential service, which it claims is subsidized by the higher rates business customers pay. In Colorado, the basic charge for a home phone line is $14.95 per month, while businesses pay $37.39 per line. US West did not return Westword's calls, but the company has said it needs more money from residential customers to offset the cost of maintaining its telephone network.

Consumer advocates reject the company's claim that it doesn't make money off residential service, and they scoff at the idea that businesses are subsidizing home telephone lines. "Business rates are higher because they're making an obscene profit on those," says Malick. "They're also making a profit on residential rates."

Those involved in the new coalition say they need to work together because US West has a regional strategy in place. "They make the same argument in every state," says David West, executive director of Citizen Action's Washington State chapter. "This is a company with one of the worst service records of the Baby Bells, and they've asked for residential rate hikes in state after state. We want to have as many groups in the region as possible involved. We're concentrating on where US West has most of their market and most of their customers."

The coalition has even created a World Wide Web site containing information on the company and a way of lodging complaints about US West service (http:// West says several hundred people have already visited the Web site and left messages about US West service problems. Thousands of people requesting new telephone service have had to wait weeks for lines in many of the states US West serves. In Colorado, state regulators have fined US West more than $5 million for its failure to provide prompt service.

The antagonism between consumer advocates and the telephone monopoly is part of the ongoing drama of radical change in the telecommunications industry. The passage of the federal Telecommunications Act earlier this year opened up the telephone industry to competition for the first time. Just as long-distance services were deregulated in the 1980s, the new law requires regional telephone companies such as US West to allow competitors access to its lines. For a fee, companies like MCI will be able to reserve space on US West's vast network and begin offering local telephone service.

Not surprisingly, US West has been trying to fend off this new competition. The Colorado PUC is charged with setting an access fee for competitors who want to use US West's system, and lawyers for both sides have spent months squaring off in hearings at the PUC's Logan Street headquarters. The PUC ordered US West to allow its rivals access to its network at "wholesale" rates of $13.60 a month for residential service and $31.41 a month for business lines. US West says that's too low and is appealing the decision.

Next Page »
My Voice Nation Help