Liars on the Line

While US West delayed service for months, the company stockpiled millions.

For years, Coloradans have been wondering: What exactly is the problem with US West?

As thousands of customers from Fort Collins to Parker waited for months to get new phone lines, neighbors asked each other why a regulated monopoly with guaranteed profit margins couldn't seem to get its act together.

Now we know.

False front: For years US West claimed that there was nothing it could do about service problems.
False front: For years US West claimed that there was nothing it could do about service problems.
False front: For years US West claimed that there was nothing it could do about service problems.
Jonathan Castner
False front: For years US West claimed that there was nothing it could do about service problems.


Previous Westword article

"Bells Are Ringing,"
August 12, 1999
US West put service on the line so it could make the deal.

April 8, 1999
As US West pulls strings at the legislature, it could cut the lines to competition.

"Calling to Collect,"
October 23, 1997
The City of Denver declares war on the state legislature over a telephone bill.

"Circling the Wagons,"
November 7, 1996
Consumer groups are banding together to fight off US West's rate hikes.

"Hide and Seek,"
October 3, 1996.
US West's game: keep its service record hidden from public view while charging the public more money.

"Dial 'M' for Monopoly,"
July 7, 1996
In the brave new world of telecommunications, US West has an ace up its sleeve: the residential phone customer.

While US West executives were publicly claiming that Colorado's rapid growth and the rise of the Internet made it impossible for them to keep up with service requests, information released as part of a consumer-fraud lawsuit now under way in Larimer County District Court reveals that the company knew what it was doing all along.

Not only did US West know that its failure to invest in the telephone network would inevitably lead to massive service problems -- the lawsuit estimates that 220,000 customers were affected -- but it was able to divert hundreds of millions of dollars collected from customers into a global financial empire that included cable-television systems in the United Kingdom, cellular-phone networks in Russia and a publishing company in Poland. In 1995 alone, US West invested $681 million in international ventures.

US West eventually spun off its cable assets -- acquired with the booty from its telephone monopoly -- into a separate company, MediaOne. Earlier this year, AT&T spent $62.5 billion to buy MediaOne. Seven MediaOne executives (many of them former US West employees), led by MediaOne CEO and former US West planning chief Charles Lillis, will share as much as $117 million when the deal closes.

US West's wheeling and dealing resulted in appalling telephone service in Colorado, but it gave company executives, including CEO Sol Trujillo, a chance to take turns becoming multi-millionaires. This year they hit the jackpot again when they agreed to merge the company with Qwest Communications International in a $45.2 billion deal.

With so many millionaires on board, it's no wonder that US West has turned out to be extraordinarily class-conscious. In one of the suit's most shocking revelations, the company has apparently ranked every neighborhood in Colorado by the income of its residents, labeled each as "gold," "platinum" or "bronze" and instructed its employees to give priority to the gold neighborhoods.

When angry customers called to complain, the company told its employees: Just lie. "If you don't see a facility in place to install service, give the customer an artificial due date and hope we make it," US West advised its service reps, according to an excerpt from a US West memo. "DO NOT advise the customers of a possible held order situation or that there may be a delay in providing service to them."

This practice even had a name: the "Customer Not Educated" policy, or CNE for short.

But it wasn't just customers whom the company deceived. For the past several years, US West's executives have made constant pronouncements that misled the general public in myriad ways, from arguing for rate hikes to telling the Colorado Public Utilities Commission that the held-order problem would soon be solved.

Call it the Colorado Not Educated policy.

The lawsuit against US West was filed in 1997 on behalf of a half-dozen customers who were unable to get telephone service. Most of them live or work on the outskirts of Denver or in outlying cities and were irate about not being able to get service for months. The Denver lawyers pressing the suit, among them Larry Pozner and Daniel Reilly, have asked the court to grant them class-action status, which would allow them to seek damages on behalf of everyone in the state who was denied service. (The lawsuit was originally filed in Douglas County, but the state courts consolidated it with a similar suit in Fort Collins and assigned it to Larimer County District Court Judge John Sullivan.)

It's likely that Sullivan won't rule on the class-action status until sometime next year. Last week the two sides agreed to meet with a mediator next month to work toward a possible settlement of the lawsuit. Trujillo has also been scheduled for two days of questioning by the plaintiffs' attorneys in January.

The company had demanded that all of the information it gave the plaintiffs be kept from the public -- US West considered it proprietary information -- and as a result, the complaint that was filed in court had pages of blacked-out information. Westword was one of several media outlets who joined in asking the court to release the documents; in a compromise, US West agreed last week to permit the release of all the information in the complaint as long as the documents it filed were kept under seal. In other words, the public can read descriptions of the documents, but it can't read the actual records submitted by the company. (US West has a history of fighting efforts by the media and the PUC to obtain the release of company documents. Three years ago, Westword tried to win the release of information from the PUC about the salaries of several dozen high-level US West executives. The phone company went to Denver District Court and was able to prevent the PUC from releasing the information.)

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