Wednesday — January 28, 2004

Oppose deregulation
of phone services

Guest opinion by Rep. KEN ROBISON

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State Rep. Ken Robison, D-Boise, is a nine-term member of the Idaho House and serves on the budget and natural resources committees.

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There is real momentum behind legislation that could take millions of dollars out of the pockets of the people of Idaho. It is one of the worst assaults on the public interest to surface in this legislative session.

The bill is HB 502, which would remove pricing for basic residential and business phone service from regulation by the Idaho Public Utilities Commission. It would allow Qwest and 16 other providers across the state to raise local rates as much as they want whenever they want.

Last year Qwest, the company that provides local service to a majority of Idahoans, asked the IPUC to deregulate its service in seven Idaho cities pursuant to existing law that allows such deregulation when there is "effective competition."

In its unanimous decision the commissioners:

• Said Qwest failed to provide evidence to support the theory that cell phones provide effective competition with Qwest’s local line service to residential and business customers.
  
   
• Pointed out that Qwest said nothing about reducing its rates to address the alleged competition but only spoke about raising rates.
  
   
• Noted that Qwest, in trying to persuade the commission to approve deregulation, said it would not raise rates until the end of 2004 and would raise them no more than $6.60 a month for residential customers and $9.95 a month for small business customers through 2007.
  
   
• Pointed out that by law the commission is required to defend the public interest. "The public interest is served if basic service rates are deregulated only when effective competitive forces exist to protect customers from monopoly pricing."
  
   
• Noted that a small reduction in Qwest’s local lines in six of the seven cities did not indicate that cell phones provide effective competition. The Federal Communications Commission has said that a national study indicated that increased use of cell phones led to no more than a 3 to 5 percent reduction in local lines.

The IPUC also pointed out that voice transmission is not the only issue. With a land line you can have Internet and facsimile service. A business may have multiple extension phones and a "rollover" feature allowing an incoming call to ring on any of its local lines.

After failing to persuade the IPUC with its bothersome concern about the public interest, Qwest decided to take a political route to higher rates. It persuaded Gov. Dirk Kempthorne to endorse deregulation and is asking the Legislature to approve it.

In its filing with the IPUC, the company asked for freedom to raise rates only in larger cities, not in rural areas. With HB 502 it could raise rates without limit in the cities and in rural areas. The same would apply to other companies providing local service in Idaho.

Under existing law the IPUC is required to allow Qwest rates that cover its costs and provide a reasonable return on investment.

The company has not been badly treated in Idaho. Its residential rates with regulation are higher than in most states where it operates with regulation, including Arizona, Iowa, Minnesota, New Mexico, Oregon and Washington.

With HB 502 Qwest stands to gain millions. Raising rates only as much as suggested in the IPUC would give the company about $30 million a year. But it could take a lot more.

Passage of this legislation is likely unless Idahoans begin to speak up, asking their legislators to vote no on HB 502.

You can leave a message for all the legislators in your district by calling the legislative information center, 332-1000 or 1-800-626-0471.

You can send a message to them at infocntr@lso.state.id.us

Write legislators at: Capitol, PO Box 83720, Boise ID 83720.

 

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