Qwest Proposes to Deregulate and Raise Phone Rates
Posted on April 14, 2008 by oregoncub
Tags, Telecommunications and CUB Connects
Oregon’s largest phone company, Qwest, has proposed a radical plan to immediately raise rates and deregulate phone services over the next three years. Once rates are fully deregulated the phone company would be able to add additional rate hikes. Of course, the company pretends that their proposal does not deregulate rates, but that is nonsense. Under Qwest’s plan, the Public Utility Commission of Oregon would no longer have the power to establish rates that are “just and reasonable,” which has been the basis for establishing regulated utility rates for decades.
Under Qwest’s proposal, rates for basic local phone service would be allowed to increase immediately by $2/month or 15.6%. Rates for Extended Area Service would remain where they are and all other retail services would be deregulated, allowing unlimited rate increases.
While Qwest does not specify what it would do with these prices after deregulation, we know that they intend to raise rates. In Washington, Qwest got a similar plan passed and immediately raised rates significantly. Based on the Washington experience, these are the increases that CUB expects would happen were the Qwest proposal to be approved.
Service & Increase
* Residential Telephone Line: 15.63%
* Residential Measured Telephone Line: 11.17%
* Call Forwarding Variable: 22.45%
* Call Waiting:100.00%
* Call Waiting ID: 20.00%
* Caller ID - Name and Number: 26.05%
* Caller ID - Number: 36.36%
* Last Call Return: 33.90%
* Selective Call Waiting: 20.00%
* Three-Way Calling: 18.64%
* Message Toll - Res: 25.00%
Qwest claims that this is not deregulation and that the PUC would have the ability to reregulate rates in the future. But such a claim is deceptive. Their plan would give the PUC the ability to investigate Qwest’s rates, but the Commission would be limited in its ability to require rate reductions, as long as Qwest could find a single provider with rates for a similar service that was within 10% of its price. This means that Qwest could raise your phone bill to $70/month as long as it could identify some other provider that was offering a similar set of services for $63/month. If they could identify someone selling phone service for $100/month, they could charge you $110/month.
So, CUB projects that Qwest’s plan would raise residential phone bills by more than $20 million per year initially and a much greater amount over time. In exchange for these increases, they are promising to invest an extra $2 million into expansion of DSL service. This does not even come close to being a proposal that is reasonable.
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03/10/17 | 0 Comments | Qwest Proposes to Deregulate and Raise Phone Rates