“It's been a long time coming,” said Public Service Commissioner Ken Toole, D-Helena, who filed a consumer complaint against the company two years ago that helped lead to the proposed settlement. “I'm pretty pleased with it. Overall, I think this is pretty significant.”
If the Public Service Commission approves the deal next month, most Qwest residential customers with basic telephone service will see a monthly reduction of at least $4.72.
As part of the deal, Qwest can offer a variety of telephone and data services at non-regulated prices, and needs only to keep the prices of its regulated services underneath a rate cap.
“We are pleased that this agreement will significantly streamline outdated regulation in Montana,” Qwest said in a statement Friday. “We hope the commission will expedite approval of this deal so that our communities and our customers will see the benefits as soon as possible.”
The settlement, if accepted, ends a battle that began in 2003, when the PSC tried to investigate whether Qwest was earning far beyond its allowable rate of return and gaining millions of dollars in excess profits.
Qwest blocked the effort with a lawsuit, which took more than three years to resolve.
Toole added his voice to the dispute in late 2006, filing a consumer complaint that said Qwest had earned $85 million more than its authorized rate of return in Montana during the previous five years. Toole was running for the PSC at the time and won election to a four-year term in November 2006.
The Montana Consumer Counsel also got involved in the case, and its experts testified last year that Qwest “over-earned” in Montana by $103 million from 1998-2006. They said that in some years, Qwest posted profits of 19 percent to 20 percent, when it was authorized by the PSC to earn only 10.44 percent.
At a hearing Wednesday, Consumer Counsel attorney Mary Wright urged the PSC to accept the settlement.
“If (the PSC accepts the deal), the commission will have fulfilled the primary goal that the Montana Consumer Counsel has had all along, which is rate relief for Qwest's ratepayers,” she said.
Under the settlement, monthly rates for basic service would be cut $2 for residential customers and at least $3.94 for business customers.
The deal also eliminates the monthly “extended area service” charge of $2.72, which applies to about 85 percent of Qwest customers, and monthly “zone charges” of 75 cents to $5.75 applied to customers living in suburban areas.
Most of Qwest's 160,000 residential customers in Montana will see at least a $4.72 monthly reduction off their current monthly basic service bill of $19.45. Monthly bills also include about $10 in federal access charges and taxes, which are not affected by the settlement.
Qwest also agreed to extend digital subscriber lines, or DSL, to 27 additional towns over the next three years. The expansion of the high-speed Internet service will cost the company about $20 million, Toole said.
Communities that will get DSL service are: Amsterdam, Boulder, Bridger, Canyon Ferry, Cascade, Clancy, Clyde Park, Cooke City, Darby, Dutton, East Glacier Park, Forsyth, Fromberg, Gardiner, Joliet, Opportunity, Park City, Pray, Roberts, St. Mary, Townsend, Ulm, Victor, Warm Springs, West Glacier, Wilsall and Wolf Creek.
Qwest must expand the service to at least 16 of those towns within a year, 23 within two years, and all 27 within three years.
Toole said many people worked on the case, but that two deserve special recognition: attorney Denise Peterson of Polson and Ron Woods of Missoula, a former PSC rate analyst who died of cancer on Sept. 26. Both put in many hours without pay on the consumer complaint against Qwest, he said.
“Without those two, I don't know how this would have gone forward,” he said. “They put a lot of work in, just for the betterment of the community.”
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Dave Gay wrote on Nov 10, 2008 10:18 AM: