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US West deregulation issues; War between union and steel mill rages on

Cranky Calls

Criticism last week of a US West-backed bill that would deregulate the monopoly phone carrier prompted an attack on the state's consumer advocacy group by the bill's sponsor, House Majority Leader Doug Dean. The proposal is a watered-down version of a previous bill that was defeated earlier in the session ("The Empire Strikes Back," February 3). It would allow US West to begin raising rates on residential customers even if competition is not in place, as long as the company could prove "substantial progress" had been made in improving service. It would also free the company from much of its current oversight by the state Public Utilities Commission.

But in its analysis of the legislation, the state's Office of Consumer Counsel, which argues on behalf of consumers, described that provision as a giant loophole that the phone company could easily use to justify hiking rates.

That criticism enraged Dean, who decided to try to slash the OCC's budget as revenge. The OCC has a staff of eight -- US West frequently has more lobbyists than that trying to sway legislators -- and Dean wanted to cut two of those positions. In his comments on the House floor, he made it clear that his grudge with the agency was personal. "The OCC sends out disinformation on legislation that's pending before this body," he told his colleagues. "It's a rogue agency."

The diatribe prompted an unusual public rebuke from Speaker of the House Russell George, however. "I'm disturbed by some of these comments," George said. "No one [from the OCC] is here to rebut these comments." George went on to say that he thought the OCC had done a good job advocating for Colorado consumers.

Although the proposal to cut the OCC's budget was rejected, Dean may still succeed in pushing his deregulation bill through the House; though most consumer groups are critical of the proposal, US West is one of the largest campaign contributors in Colorado, and has extraordinary clout in the state legislature. In the last half of 1999, US West poured nearly $20,000 into legislators' campaign accounts.

That frightens the small companies trying to compete with US West. "It's been overwhelming what we've had to deal with," says Danny Miller, president of Voice Networks, a locally based firm that buys space on US West's system and resells it. Voice Networks is one of the few upstart phone companies that serves residential customers.

Miller says US West has consistently tried to sabotage his company, refusing to give it prompt access to its telephone network as it's required to do under the federal Telecommunications Act, and Voice Networks is now suing US West in federal court, alleging that the phone carrier has violated the telecom act.

Dean's proposed bill would only make things worse for Voice Networks, says Miller. "Our concern is that two to three years down the road, US West would be removed from the scrutiny of the PUC, which has not been very effective as it is. The only thing worse than a regulated monopoly is an unregulated monopoly."

For its part, US West insists that under current law its competitors have unfair advantages, since the PUC won't allow US West to cut its rates for some services. (This is part of an effort by the PUC to prevent US West from engaging in "predatory pricing," or slashing its rates just long enough to drive new competitors out of business.) US West says Dean's bill would keep its prices under regulation for several years, and rejects the OCC's analysis of the bill.

"There are service-quality standards tied to rate changes," says Anna Osborn, spokeswoman for US West. "The PUC would have service-quality and price-change oversight. We think this is an important step toward bringing the benefits of full competition to all consumers."

But consumer advocates say the notion that US West wants to see more competition is laughable, and the phone company seems more intent on settling scores.

"US West is the class bully down here," says Chuck Malick, who lobbies the legislature on behalf of the Colorado Public Interest Research Group. "A Doug Dean bill comes up, and the OCC puts out an opinion saying it's bad for consumers, and the next thing you know all the monopoly lobbyists are after them. I often wonder if the people who pay phone bills realize they're paying for someone's effort to destroy the consumer's protector."

COPIRG has also learned what the price is for angering the powers that be. The group has played a leading role in pushing for legislation to curb urban sprawl in Colorado. After the legislature failed to approve new laws limiting sprawl, COPIRG and its allies announced they would attempt to put such a proposal on the November ballot. The state homebuilders' association was angered by that and lobbied successfully for a bill that will make it harder for COPIRG to collect fees from students at state universities, the main source of its funding.

Malick notes that students at the colleges have approved the existing funding structure in campus elections, but that doesn't seem to matter to legislators beholden to corporate interests. "It makes me sad about the process to see our elected representatives overturning local elections," he says. -- Stuart Steers

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