Qwest seeks removal of cap on phone-service costs

Qwest Communications International Inc. wants to remove a cap on its basic residential phone service, letting the market determine the price.

But both the Utah Committee of Consumer Services and the Salt Lake Community Action Program are worried that the service's cost will rise, especially when the service has little if any competition from other telecommunications companies.

A bill to allow the cap to be removed was passed out of a Senate committee on Wednesday. HB216 got a unanimous vote and moves on to the full Senate. The House already has voted 73-0 for the bill.

"We are still concerned that for those who really only want and for those who can really only afford the very basic service that there really aren't alternatives," Betsy Wolf, an advocate with Salt Lake Community Action Program, told the Senate Transportation and Public Utilities and Technology Committee on Wednesday prior to the vote.

She said many elderly people do not like using cell phones and that to get Voice Over Internet Protocol communication, they need both a computer and an Internet connection.

"We are concerned that telephone is really a lifeline service for a lot of people, especially those who are elderly or disabled and are more, not necessarily totally, confined, but more confined to their homes, that it remain an affordable and accessible service," she said.

The bill's sponsor, Rep. Fred Hunsaker, R-Logan, said the $11-per-month cost for the basic service is the lowest in Qwest's 14-state operating region. The price was as high as $13.13 per monthly in 1987, but the cap was added in 2005 and set at $11. Hunsaker said low-income consumers can opt for a "measured" service for $9.23 a month, which includes 180 minutes of outgoing calls and an unlimited number of incoming calls.

Jerry Fenn, Qwest's Utah president, said consumers have inexpensive wireless and VOIP options. More than 2 million Utahns have cell-phone service, and the state's cell-phone service market is twice the size of the land line market, he said.

"What we're asking for is that you remove this price cap on basic residential service, to allow the market to operate, and to allow us to price services based upon the market and in response to a competitive environment," he said.

Fenn said Qwest has a good track record with the pricing of other services, which have had pricing flexibility for four years.

"If we were to come in and raise the price $20 a month on basic residential service, we would have to expect the consequence of such an action, and the consequence would be people would be giving up their land line phone for wireless phones," he said. "I think the marketplace constrains rational economic behavior."