Getting the Message

At a hearing last week, the Colorado Public Utilities Commission invited anyone who wanted to comment on US West's pending merger with Qwest to come forward and speak. Only a handful of people showed up at the meeting overseen by PUC chairman Ray Gifford, but those who did had a lot to say. One owner of a small Internet service provider in north Denver said he had lost many customers because of US West service outages that lasted for days.

"US West has just about put me out of business three or four times," John Cero told the commission. "The latest fiasco was last week. People from Thornton or Commerce City couldn't dial into our system. It took six days for them to fix it. This is typical."

Some of the most interesting complaints, though, came from a surprising source: employees of the City of Denver.

Tim Dunn, the city's deputy manager of safety, told Gifford that basic 911 emergency calls could be affected by US West's service problems. "Many in the 911 community are of the opinion that US West doesn't have adequate service or support for 911 operations in Colorado," said Dunn. "US West is the sole provider of that system at the present. We want to make sure the [merged] organization is committed to 911 in this state."

Sarah Harmer, a communications administrator for the city, said Denver has grown increasingly frustrated with the telephone company. "We're experiencing numerous problems with service," she said. "When we go to US West with a complaint, we don't seem to get a response. We get what I consider to be pat answers."

None of this should have been news to the PUC. But Colorado's monopoly telephone provider has been in the headlines the past few weeks, as a series of revelations in court and before the PUC have confirmed many of the allegations against the company made in a lawsuit now under way in Larimer County ("Liars on the Line," November 11).

The consumer fraud lawsuit, filed by several US West customers from different parts of the state, made a series of startling claims: that 220,000 customers had been affected by "held orders"; that the company had ranked every neighborhood in Colorado as either "gold," "platinum" or "bronze" based on income levels, and told its employees to give priority service to wealthy neighborhoods; and that customer-service representatives routinely lied to people about held orders and even made up installation dates to pacify angry customers, a policy known as "customer not educated."

US West at first called the allegations "inflammatory and untrue" and insisted the company's reputation was being sullied by gold-digging trial attorneys. But soon after the allegations became public, documents that came to light as part of the litigation and in hearings before the PUC over the company's dismal service record confirmed many of the claims in the lawsuit. The revelations have undoubtedly caused heartburn in the company's public-relations department.

On December 1, the company acknowledged before the PUC that it had, in fact, practiced the "customer not educated" policy for two years. US West claimed that the policy was in the customers' best interests, since it didn't want to "alarm" residential customers about delays that might not occur. The policy was discontinued on November 9, which just happened to be the same time that the allegations in the Fort Collins lawsuit were being reported.

Other documents that came to light during the PUC hearings revealed that US West had dramatically scaled back its level of investment in Colorado's telephone network between 1994 and 1998, reducing the amount it spends per new telephone line from $1,400 to $1,000. During the same period, Colorado's population boomed; the resulting service fiasco was probably inevitable, given the anemic levels of investment the company made in the state's phone system.

The extent of the held-order problem also seems to have been far larger than US West had ever publicly acknowledged, and it's getting worse. Documents filed in the court case reveal that through August of this year, 38,286 orders for new phone service were delayed from one day to as many as sixty days. That's a dramatic increase from last year, when there were 34,656 such held orders for the entire year. The document revealed roughly 200,000 held orders in Colorado since 1993. Last year the company claimed there were fewer than 1,000 held orders that went over thirty days, but the information released in court showed there were more than 8,000 such delays in 1998.

A spokeswoman for US West insists the figures distort the company's service record. "The way the plaintiff's attorneys use the numbers grossly inflates the number of customers who were without phone service," says Anna Osborn. "We feel they threw in everything including the kitchen sink."

Osborn says many of the orders were from customers who already had one telephone line and were simply ordering additional service. She says the attorneys pressing the lawsuit are trying to make it seem as though huge numbers of Coloradans have gone without any phone service. "Over that seven-year period, we took 14.7 million orders for service in Colorado," she says. "We filled 98.6 percent of those orders on time. When you put it in that context, it's a small percentage of orders we're talking about."

Osborn also says the company will substantially increase its spending on the telephone network in Colorado this year, pumping $873 million into the local phone system.

During the PUC hearing on December 2, US West director of regulatory affairs Paul McDaniel acknowledged during questioning that the company had ranked service areas as either "gold, silver, or bronze" and then "prioritized" each area for construction spending. A lawyer for the state Office of Consumer Counsel pressed McDaniel for more details, but US West's attorney repeatedly intervened, insisting that much of the information involved "confidential" business practices and should not be made public.

The OCC -- which is charged with representing Colorado consumers before the PUC -- has asked the commissioners to order an immediate $11 million refund to US West customers in Colorado because of the poor service. The agency also wants those rebates to escalate if service doesn't improve. "The whole idea is to give them an incentive to fix it," says Dian Callaghan, director of administration for the OCC.

The PUC has several rules that mandate prompt telephone service in Colorado, and the commissioners have already found US West to be in violation of those rules. They are now deciding what sort of penalties to assess against the company for its service failings (a proceeding that is separate from the hearings over the Qwest merger).

But Callaghan notes that her agency can't even agree with US West over the language the company uses to describe its failure to meet the state standards. When the OCC refers to US West's "violation" of the rules, US West describes it as a "variance."

"That indicates US West doesn't think it has to be in compliance with the rules," says Callaghan with a wry smile. "I'll try that out the next time I get stopped for speeding: 'Officer, that speed limit is just a guideline.'"

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Stuart Steers
Contact: Stuart Steers

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