Telephone service in three Utah County cities will be upgraded, but US WEST officials say how soon is up to the Utah Public Service Commission.

A proposal is before the commission that, if approved, would allow US WEST to freeze rates for four years and use any additional profits to upgrade telephone service to more than 40 Utah cities and to colleges and universities. Company officials estimate more than $100 million will be spent on the modernization. Lehi, Payson and Spanish Fork are among the cities where service will be enhanced.US WEST now operates under an agreement where profits cannot exceed 11.8 percent, which is the lowest allowable rate in the nation. Under the proposal, US WEST wants a four-year freeze on rates even if its profit margin exceeds 11.8 percent. The company wants a profit range set at between 11.8 percent and 14 percent. Earnings above that range would be shared evenly with customers.

Company officials say an increased profit margin will attract investment dollars into Utah that will be used toward modernization. Otherwise, stockholders will invest modernization money into states with a higher return allowance.

Steve Linton, US WEST public policy manager, said the company is asking for the freeze because it anticipates that new, more efficient equipment will lower costs, and the company wants to useincreased profits to pay for modernization instead of decreasing rates. The proposal is not to raise rates, just stabilize them.

"Ironically, what happens is the company loses money when we improve service," Linton said.

Linton said US WEST is committed to improving service in the three Utah County cities, but the timetable for completing the improvements depends on available money. Even if the proposal is rejected, the improvements still will be completed someday, he said.

"We can't accelerate the modernization of the telephone system if we can't accelerate the payback," Linton said.

The company will reinforce the three switching offices with fiber-optic and digital microwave technology. Utah County's other cities already have received the improvements. Linton said the company has not yet decided whether to make improvements in Eureka and Goshen.

Linton said the modernization will benefit the communities because it will attract more business. More companies prefer to locate management personnel in outlying areas because of the lower costs. The enhanced system will provide the link companies need to communicate with bigger markets.

"If you're out of that link it's like the railroad bypassing your town," Linton said. "The ability to have access either means a business will locate in that area or go somewhere else. The improvements will get rid of the geographical prejudice."

Hearings on the proposal are expected to begin in December. The Public Service Commission and US WEST will decide on rates and how the company's revenues will be distributed. A final decision should come in March.

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(Chart)

New telephone services

New telephone services coming to Spanish Fork,

Payson and Lehi:

- Call switching

- Speed calling

- Call waiting

- Three-way calling

- Call forwarding

- Improved transmission clarity

- Faster connections