House committee passes telecom bill

A bill to further deregulate Qwest Communications International Inc. and put it in line with what its competitors can do has passed out of a Utah House committee.

SBzs108 was passed out Monday by the House Public Utilities and Technology Standing Committee. The bill, already through the Senate, would reclassify Qwest regulated services and remove Utah Public Service Commission regulation of those retail services. It also would allow Qwest to make promotional offers.

But the bill's sponsor, Sen. Curt Bramble, R-Provo, said basic residential service rates would be frozen at 2004 levels, providing a safety net.

"It freezes the price of basic service at the 2004 rate, and it also empowers the Public Service Commission specifically that, should the market not prove to be as competitive or should there be abuses of this, that the Public Service Commission can, without further statutory changes, bring Qwest back into the regulatory scheme."

The bill is supported by the Public Service Commission, the state Committee of Consumer Services and Communications Workers of America Local 7704 in Salt Lake City, among others.

Supporters said the bill represents deregulation progression from a 1995 telecom reform act.

"This seems to be the next logical step," PSC chairman Ric Campbell said.

Campbell noted that Qwest had been granted pricing freedom in 98 percent of its business exchanges and more than 90 percent of its residential exchanges.

"What this bill does is grant them pricing flexibility like their competitors in all their exchanges except for basic residential service," Campbell said. "We see this bill as the next step as competition unfolds."

A PSC report last fall said Qwest controlled 84 percent of the market in 2001 where it faced competition in Utah, but that number had dwindled to 74 percent last year. Qwest's share of the residential market fell from 94 percent to 85 percent during that time, while its share of the business market slipped from 68 percent to 53 percent.

Jerry Fenn, Qwest president in Utah, said the bill has components that benefit all players in the industry. He said "there should be regulatory parity" among companies.

The 1995 state legislation "served us well for 10 years. After 10 years, the time has come to make some changes to take the shackles off of Qwest so that we can compete effectively in the marketplace," Fenn said.

Telecom legislation over the years often has been contentious. Bramble, Fenn and a few lawmakers remarked on the rarity of the bill in that it garnered support from Qwest, the PSC, the consumer committee and the labor union. "This is almost akin to the crickets and the seagulls as far as ranking up there as a miracle," Fenn joked.

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