AG opposes Qwest request to deregulate prices

OLYMPIA—Attorney General Christine Gregoire Wednesday opposed Qwest's request to the Washington Utilities and Transportation Commission (WUTC) to deregulate rates for its business customers.

In testimony filed with the WUTC, attorneys for the Public Counsel Section of the Attorney General's Office argued that deregulation would harm the company's small and medium-sized business customers because Qwest continues to dominate the local telecommunications market in Washington State.

"Significant numbers of Qwest business customers throughout Washington have few, if any, competitive options," Gregoire said. "Allowing Qwest to set its own prices for essential services may mean higher operating costs for businesses already struggling in a down economy."

Rates for Qwest's business customers are currently set by the WUTC after a review of the company's earnings. State law permits elimination of rate regulation only if Qwest can prove that it faces effective competition and that there are not significant numbers of "captive customers" who have no viable alternative service provider.

State attorneys argued that, while some competitors operate in Washington, Qwest continues to serve the vast majority of the market in many parts of its service territory, particularly for small and medium business customers.

"Qwest's claim that all its business customers in every corner of the state have real competitive alternatives is simply not supported by the facts," said Senior Assistant Attorney General Simon ffitch, chief of the Public Counsel office. "The worst thing the WUTC can do in this case is prematurely deregulate a company that still dominates the market and can dictate the prices it charges to customers."

Qwest's business rates are frozen until 2004 as a condition of the US West/Qwest merger. After that, Qwest cannot raise business rates without approval from the WUTC.

In May, Qwest filed a formal request to eliminate the traditional rate review. If granted, Qwest would be able to raise rates for any of its business services in Washington without WUTC review.

Washington State Office of the Attorney General release, August 13

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