The Utah Public Service Commission is holding a a two-day hearing on alternative forms of regulation for US WEST Communication (formerly Mountain Bell) with an informal discussion with the involved parties.

Although they did not allow sworn statements or witnesses, commissioners grilled the parties about their proposals and allowed them to question one another during Wednesday's hearing. Involved parties include the Utah Division of Public Utilities, the Committee of Consumer Services, Mountain Bell, AT&T, MCI, Continental West and other independent phone companies.The PSC called the hearing as part of an agreement with lawmakers. PSC agreed to hold hearings after Mountain Bell failed to push a bill through the Legislature that would have deregulated telecommunications in Utah. After the hearings, the PSC will make a recommendation to lawmakers, who may face another bill in the next session.

Prior to the hearing, each involved party filed a statement with the PSC, stating its position and suggestions. The parties presented their positions in opening statements before the commission. The commission, in turn, asked each party to respond to six main questions it had regarding telephone deregulation.

US WEST Communications proposed three alternatives to the current "rate of return" regulation, where profits are limited by regulators and any earning in excess of that limit warrants a rate change. It suggested service-by-service regulation, incentive regulation, where the profits are split between the company and customers and setting rates by a social contract.

"Our position is that changes in regulation should be made in the public interest," said Ted Smith, a representative from US WEST.

The commission asked Smith to respond to its questions first, asking him to explain how state regulation has been inadequate.

Smith said state regulation was causing US WEST to lose money and services. "We believe the problem is related to the process and we can meet the goals of protecting the public in a different way," he said.

Ted Stewart, PSC chairman, said the commission would take Smith's assertions seriously if he could document or quantify the companies losses. Smith said the level of regulations has dramatically increased and it often results in fewer investments.

"Where can you show me that US WEST didn't make an investment because of regulations?" Stewart asked. Smith said he couldn't supply an example on the spot. "In the event that you can provide specific information, that would be helpful," Stewart said.

William Levis, an MCI representative from Denver, said US WEST has failed to supply evidence of its losses on other occasions. He said MCI feels it's US WEST's responsibility to show that it is suffering from the regulations.

Several other party representatives said regulations are the most efficient way to administer to the public's needs. Continental West was the only other organization that supported deregulation policies similar to those of US WEST.

The hearing continued Thursday and included testimony from sworn witnesses.