[1st-mile-nm] Qwest @ PRC

[Richard Lowenberg]

www.santafenewmexican.com/Local%20News/Qwest-rates--rules-up-for-review

Qwest rates, rules up for review

PRC to begin hearings on new service-plan agreement

Julie Ann Grimm | The New Mexican

7/6/2009 - 7/7/09

Whether telecommunications giant Qwest can raise prices and how much it will
have to invest in service upgrades in New Mexico are among issues the state
Public Regulation Commission plans to decide this year.

Today marks the beginning of a hearing process to address the next cycle of
regulations for Qwest, whose service plan agreement with the state expires at
the end of the year.

A PRC-appointed hearing officer will accept testimony and begin to hear from
businesses and the state Attorney General's Office about what will be the third
agreement on "alternative form of regulation" ? referenced by those involved
as AFOR III.

The jargon describes the state's process of moving from a regulated monopoly
provider system to one based on a competitive market. It means that
commissioners will sort out differences between the large telecommunications
provider and consumer advocates such as state Attorney General Gary King, as
well as smaller telecommunications businesses such as Cyber Mesa.

Qwest, which has territory that includes the most-populated parts of New Mexico,
including most of Santa Fe and Taos counties, wants the state to adjust price
caps and consider new infrastructure investment rules when regulations expire
this year.

In 2001, Qwest agreed to spend about $788 million under a regulatory agreement
with the state, then entered its second "alternative form of regulation" in
2007. Each agreement has required the company to upgrade the core
telecommunications system under its control and to offer services to new
residents.

King advocates that the PRC to "hold the line" on rate increases and force Qwest
to make concessions that encourage competition for Internet services and further
expand what's available to residents of underserved areas, said Brian Harris, an
attorney working on the issue for King.

More than a dozen expert witnesses from six interested parties, including Cyber
Mesa Computer Systems and Time Warner Telecom and other businesses, are
expected to offer testimony this week before James C. Martin, appointed by the
PRC to issue a recommendation by Sept. 30.

Bruce Throne, an attorney for Cyber Mesa, said his client's main interest in the
new regulations is that Qwest isn't allowed to set prices that eliminate the
competition, including free months of service or other promotions that undercut
actual cost of service.

New Mexico-based Cyber Mesa provides phone, Internet access and high-speed data
services through what is called a "wireline" service, which leases some
centrally controlled infrastructure and has its own facilities for transporting
traffic.

"Cyber Mesa believes that customer choice is the best way to ensure quality of
service so that if a customer is not happy with their provider, they can go to
another provider," Throne said. "They want to make sure that Qwest cannot drive
them out of business."

The small company also asked for clearer definitions of terms and calculation
procedures in the next set of regulations.

Qwest attorneys argue that the company already has "significantly eroded market
power" and wants its price ceilings relaxed. Its proposal for 2010 to 2012
would add $1.50 for basic "local exchange" service, raising the price to $15
from $13.50.

The company provides service in 14 states, and its New Mexico customers pay the
fourth-lowest cost, according to a Qwest document. The company also wants to
reserve the ability to offer promotions for both packaged and basic products.

Harris hopes residents in the Qwest service territory will tell the commission
about their experiences with services. Examples include places where fast
Internet is not available or where phone customers hear static after heavy
rain.

"There is a balance between the public interest and the private interest, and
that is a balance that is constantly changing," Harris said. "In this
particular situation, what we are asking the PRC to do is find a little bit
more on the side of the public interest. The profit motive alone is not going
to bring the Internet to the most isolated pockets of New Mexico."

Public testimony begins at 10 a.m. today on the second floor of Marian Hall, 224
E. Palace Ave.




-- 
Richard Lowenberg
1st-Mile Institute
P.O. Box 8001, Santa Fe, NM 87504
505-989-9110;   505-603-5200 cell
rl at 1st-mile.com  www.1st-mile.com

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