Even after state legislators passed a bill last March meant to open Colorado's telecommunications market, one small Lakewood company is accusing the Public Utilities Commission of helping US West enforce a monopolistic stronghold.
Three and a half years ago, Lynn Langford and Jeff Smith founded Mountain Solutions Ltd. Inc., a company that uses voicemail and call-transfer technology purchased from US West to offer customers in some areas cheaper rates for in-state long-distance calls. Langford says the company was formed in response to the growing frustration residents of rural and mountain communities had about being charged a per-minute long-distance rate for calls to the Denver metro area. Customers of companies like Langford's pay a flat monthly rate to make unlimited calls to Denver. A person in Conifer, for example, calls a local Mountain Solutions number. Then the call is transferred into Denver, bypassing any long-distance charges.
"Our system was created out of angst," says Chip Hufton, a Mountain Solutions employee. "Without it, it's more expensive for people from Bailey to call Denver than it is for them to call Orlando, Florida."
(That's a slight exaggeration, but only slight: An AT&T operator confirms that the company charges 25 cents a minute for a weekday call from the growing bedroom community of Bailey, on U.S. 285, to Denver, and 27 cents a minute for a weekday call from Bailey to Orlando.)
After a year of litigation with US West, an administrative law judge at the PUC recommended that Mountain Solutions be considered a long-distance carrier, lumping it into the same category as companies such as AT&T, Sprint and MCI. These companies, referred to as inter-exchange carriers, pay steep access tariffs to US West. Now Mountain Solutions may have to do the same.
Langford, who is the president of Mountain Solutions, says the PUC, more than US West, is forcing the tariff issue. She claims that the commission is biased toward maintaining the regulated US West monopoly.
It was the PUC, in fact, that wrote a letter to US West officials over a year ago informing them that the commission thought Mountain Solutions should be paying a higher tariff. Despite that, PUC spokeswoman Barbara Fernandez insists that "the PUC does not have a position on this. This doesn't have anything to do with a monopoly. This has to do with charges."
Fernandez says the PUC became interested in Mountain Solutions after a consumer call in July 1994 that led to an investigation. She says that prior to the investigation, the PUC had not seen a service like the one Mountain Solutions offers. Fernandez argues that the PUC's position is simply that the Lakewood company is an inter-exchange carrier, "a leapfrogger" that is not paying the correct access tariff.
Mountain Solutions contends that because voicemail and call-transfer services are unregulated and because its own service is geographically restricted, it should not have to pay the same high tariffs as long-distance providers. "We feel that US West is making a last-ditch effort to enforce its power before next year's deregulation," says Hufton.
That will happen in July 1996, when House Bill 1335 goes into effect. The bill is designed to weaken the grip US West currently holds on Colorado telephone service. It will influence rates not only for local telephone service, but for computer on-line and cable-television services as well.
Langford says that because the new bill is not yet active, the PUC has no framework with which to consider her company. "They have misdefined and misunderstood what we do," she says.
Fernandez, however, disputes the claim that it is in the PUC's interest to keep the US West monopoly. After all, she points out, the commission has been directed by the state legislature to help implement House Bill 1335. She argues that other companies in Colorado offer the same service as Mountain Solutions and pay the proper tariff. "Avicomm is out there competing, and it is paying the proper charges," she says.
Scott Wallis, president of the Englewood company Avicomm, is glad Fernandez thinks so. But the fact is, his company has a contract with Mountain Solutions to use the same technology it does and pays the exact same charges to US West. Wallis says that just like Mountain Solutions, his company uses and pays for US West technology in order to offer the flat-rate service to people outside Denver. "We're not a local service or an inter-exchange service provider," he says. The old laws only allow for those two categories. There needs to be a category to allow our service to exist, as opposed to pigeonholing us into the old categories."
US West maintains that Mountain Solutions should pay the inter-exchange tariff and that deregulation is not related to this dispute. "We are open to competition, but they need to compete on a level playing field," says US West spokesman Jeff Garrett. "That involves paying access charges just like AT&T, MCI and any other long-distance carrier. If it walks like a duck, sounds like a duck, then it probably is a duck; if they're selling long distance and packaging long distance, then they probably are a long-distance company."
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Langford says one fact that is getting lost in the costly litigation process is that around 10,000 people along the Front Range rely on the flat-rate service. Mountain Solutions is the largest of the companies to offer the service, with just under 6,000 customers throughout Fort Collins, Greeley, Loveland, Colorado Springs and portions of Summit, Clear Creek, Grand, Park and Eagle counties.
This week the PUC is scheduled to decide whether Mountain Solutions will have to pay the higher tariff. Should the commissioners decide that US West must charge her company as an inter-exchange carrier, Langford says, she'll take the issue to district court.
"The reality of the situation is that US West can shut us down," she says. "And they would like nothing better than for that to happen.