Mountain Bell lost another battle in its fight to remove the shackles of government regulation as Utah's Public Service Commission denied the phone company's request to remove price regulation on in-state long distance and other "transport services."
The commission found inadequate competition and alternatives other than Mountain Bell to justify removing pricing restrictions on services such as in-state long distance and WATS lines."For some message telecommunication services, including WATS services, the evidence suggests that alternatives to the Mountain Bell services are available, but not for all geographic areas in the Mountain Bell service territory," the PSC ruled.
"We also question whether the increased cost and inconvenience to the consumer associated with some alternative services is sufficient to prevent them being considered `reasonable available alternatives,' " the commission said.
Commissioner Brent H. Cameron issued a separate concurring opinion saying he placed a greater reliance on competition as a substitute for regulation and urged the Legislature to give the PSC more latitude on examining deregulation petitions from telecommunication utilities.
"We are disappointed with the ruling because we believed we presented sufficient evidence supporting more flexibility in pricing transport services," Mountain Bell spokeswoman Carol Dunlap said.
She said the phone company, which recently changed its name to US WEST Communications, agreed with Cameron's opinion.
The ruling, issued Monday, marks the third time Mountain Bell has requested deregulating specific services under the 1985 Public Telecommunications Utility Act. The PSC deregulated mobile and rural radio services in an order now on appeal to the state Supreme Court, and the phone company's request to lift rate restrictions on its central office based services was granted in part earlier this year.
In an effort to deregulate almost everything in a single swipe, Mountain Bell tried to get the Legislature this year to deregulate all but basic local service, arguing that competition was gouging the phone giant's profits and current laws were too cumbersome and time-consuming.
The central office based services decision and hearings on removing price restrictions from transport services were held during the Legislative session, before Mountain Bell removed its bill under pressure from business and consumer groups.
In its order, the PSC said it could not find evidence supporting Mountain Bell's contention that "effective competition" existed, so the areas of telecommunications under consideration should not have their prices regulated.
The order cited evidence presented at the hearing that showed Mountain Bell having an 87 percent market share of the in-state long distance business over competitors such as Tel America, MCI and US Sprint.
"The commission finds that Mountain Bell's concerns about its economic viability and financial integrity are not supported by the evidence presented in this proceeding particularly in light of Mountain Bell's overall market share and its current earnings," the order said in countering Mountain Bell's arguments that its request was in the public interest.
Regulators have initiated a rate case and are now negotiating a rate reduction with Mountain Bell because of the phone company earning in excess of its PSC approved 14.2 percent rate of return on stockholders' equity.
The Division of Public Utilities recommended "banded rates" for transport services, giving a utility flexibility to set prices within a high and a low limit.
But the PSC found that a recent state Supreme Court ruling casts doubt on the commission's authority to establish banded rates.