A proposal to modernize telecommunications facilities in rural areas served by US WEST Communications drew near unanimous support from the 30 people testifying before the Utah Public Service Commission Friday.
But US WEST's proposal for funding those improvements received mixed reviews.The commission is holding hearings on a US WEST proposal for an incentive regulation plan that would effectively raise the amount of profit the company can earn. In return, the company proposes to freeze customer rates for four years and share profits on a 50-50 basis with customers if revenues exceed a 14 percent rate of return.
US WEST says the incentive plan is needed to convince investors to put up $91.7 million to finance up-grades at 41 central switching offices, installation of fiber optic trunk lines and enhancement of a telecommunications network that would link Utah's colleges, high schools and other education facilities to allow two-way video links to improve education offerings in rural areas.
Witnesses representing low-income or senior citizen groups generally opposed the incentive plan but supported the need for improved rural telecommunications. Many also expressed dissatisfaction with the company's plan to restructure rates in a way that would boost residential rates while lowering business rates.
Joe Duke-Rosati, representing the Salt Lake Community Action program, said freezing rates would prohibit customers from benefiting from the current trend of rate reductions.
Alice Johnson, director of the Davis County Council on Aging, questioned whether the company had completed modernization efforts it promised in return for a rate increase in 1985.
"Who monitors the utilities to ensure the money raised is used in the way proposed?" Johnson asked. "How many times are we supposed to pay for the this."
David Grangroth, president of the Utah Telecommunications Management Association, said Wasatch Front customers would be penalized by the plan because this area would receive virtually no benefit from the improvements.
The modernization element received strong support from those representing education and rural government groups who believe the improvements will substantially improve opportunities in outlying areas.
Hearings on the incentive proposal will conclude March 15.