Disconnected

As US West pulls strings at the legislature, it could cut the lines to competition.

The bill-signing at the Library of Congress was meant for the history books.
To mark the passage of the Telecommunications Act of 1996, President Bill Clinton flourished a pen used by Dwight Eisenhower to approve the legislation that created the interstate highway system in 1957. The signing marked the birth of the "information superhighway," Clinton told his audience, opening up the highly regulated phone industry to competition and giving consumers new choices in local telephone service. One day soon, he said, rival companies will offer you low-priced packages that bring not only local telephone service, but also long distance-service, Internet access and cable television into your home for one fee.

After signing the bill on paper, Clinton picked up a digital pen and signed a second copy that was instantly sent around the world on the Internet. To mark the technological revolution promised by the new law, comedian Lily Tomlin appeared on a video link, playing her character Ernestine the telephone operator and replacing her famous "one ringie-dingie" opener with "one gigabytie."

Colorado was already exploring this new electronic frontier. In 1995 the state legislature had passed a bill sponsored by Representative Tim Foster that called for opening the local telephone market to competition. Lawmakers predicted that Colorado would be one of the first states to give the public cheap access to an array of telecom services. An alphabet soup of telephone companies announced their intent to compete with US West for local service: industry giants like AT&T and MCI WorldCom, as well as dozens of small startups that saw an opportunity to enter what had long been a monopoly market.

MCI WorldCom, which already had a calling center in Colorado Springs employing several hundred people, made ambitious plans to offer local business and residential service. In the fall of 1997, the company did a test run on residential phone service, using 2,000 employees who had volunteered to be guinea pigs.

The eight-week trial was a fiasco. Phone lines suddenly went dead, people received services they hadn't requested, and bills were scrambled. When the company put service orders through to US West, as often as not, the phone line was simply disconnected.

"The US West system failed," says Bill Levis, western states policy director for MCI WorldCom. "We began initial testing with the US West operating system to transfer service from US West over to us. That computer service never worked."

In order for any telephone in Colorado to function, it has to be linked to the US West network through a huge computer program known as the Operational Support System, or OSS. That system allows the phone company to process calls, connect with other networks and handle billing, maintenance and repair requests. Under the federal Telecommunications Act, all regional phone companies such as US West (often referred to as the "Baby Bells" after the breakup of Ma Bell almost two decades ago) are required to make the system available to competitors. But Levis insists US West has never done this.

"Their computer system still doesn't work, and they won't allow a third party to test that system," he says.

Instead of the local telephone competition promised by state and federal lawmakers, Colorado has seen bitter infighting and finger-pointing. In the past few years, US West and its competitors have filed numerous complaints and appeals with the state Public Utilities Commission, which regulates phone service in Colorado. US West has gone to court seventeen times to overturn PUC decisions mandating competition.

The state's longtime monopoly phone-service provider, which still controls 98 percent of the phone lines here, has been fighting on other fronts, too. It has secured its status as a political powerhouse, pouring money into state legislative races and into the 1998 campaign of Governor Bill Owens.

Now US West is seeking political payback. A US West-backed telecommunications bill is expected to be introduced this week in the legislature by Representative Jack Taylor of Steamboat Springs. While the final details of that legislation aren't yet known, it's certain to resemble other US West-backed bills that have been introduced in New Mexico, Oregon and several other states. Those bills call for massive deregulation of US West, giving the Baby Bell extraordinary new power to set rates without government oversight and putting in place new requirements for competitors that may stifle any hope of real competition.

The head of the Oregon utilities commission describes US West's bill in his state as a "rape of the rate-payer" and says US West hid its agenda behind a "Klingon warship cloaking device." In New Mexico, US West hired ten lobbyists, including a former governor, a former attorney general and the son of a prominent senator, to push through a similar bill.

If comparable legislation is approved in this state--and it may well be--consumer advocates warn that Colorado telephone customers will be the losers.

"It would be a disaster to consumers to deregulate US West in every market," says Ken Reif, director of the Colorado Office of Consumer Counsel. "One of the worst things you can do is to allow a monopoly to be deregulated when there's no competition. Then you have the worst of all possible worlds: an unregulated monopoly."

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