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State regulators conditionally approve plan to give Qwest more pricing flexibility
July 25, 2007 State regulators conditionally approve plan to give Qwest more pricing flexibility OLYMPIA, Wash. – State regulators have conditionally approved a settlement agreement that calls for easing regulations of most Qwest’s residential telephone prices and services throughout Washington for the next four years. In supporting the modified “alternative form of regulation,” or “AFOR” agreement, the Washington Utilities and Transportation Commission (UTC) is giving Qwest more flexibility to determine rates for many phone services previously set in tariff by the agency. However, the commission stated that the AFOR could not take affect until the company submitted an acceptable plan for ensuring service quality for wholesale services. The agreement allows Qwest to increase the monthly rate for basic residential telephone service up to $1 during the four-year period. Currently, Qwest residential customers pay $12.50 a month for basic phone service statewide (plus taxes), a rate unchanged since 1998. It also states that the company is no longer required to provide residential customers one free directory-assistance call each month, and may change prices of non-essential features, such as caller ID, call waiting and voicemail. The UTC will continue to handle consumer complaints. UTC Chairman Mark Sidran noted that under state law, the commission must approve an AFOR plan if it finds, on balance, that the plan meets a list of considerations that include reasonable rates, service-quality protection and enhancement of competition. “In recent years, Qwest has been steadily losing traditional wire-line residential customers to unregulated competitors such as wireless and cable,” he said. “We believe this alternative regulation plan as modified allows Qwest to compete fairly with these unregulated companies while protecting customers in areas where Qwest still has undue market power.” As a condition of the AFOR, the commission will require Qwest to invest $4 million to expand high-speed, wireline Internet services, such as digital subscriber lines (DSL), in underserved areas of Washington. Qwest has set a goal of providing high-speed Internet service to 83 percent of its Washington customers by 2010. The AFOR does not apply to rates for Qwest’s business customers. The UTC approved pricing flexibility for Qwest business lines in 2004 and 2005. The UTC regulates rates charged by local telephone companies operating within Washington. The commission does not regulate cellular or Internet telephone service. Qwest filed its original request Oct. 20. The eight-party settlement agreement was filed March 6. Denver-based Qwest is the largest local telephone company in Washington providing just under 2 million telephone lines in the cities of Seattle, Tacoma, Bellevue, Olympia, Bellingham, Aberdeen, Longview, Vancouver, Bremerton, Spokane, Moses Lake, Yakima, Pasco and Walla Walla. ### Editor’s note: A copy of the commission’s order as well as other documents related to the case is available on the UTC’s Web site at: www.utc.wa.gov/061625 |
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