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AN ELECTRONIC STATE: `A VITAL LINK': US WEST SAYS ITS PLAN TO UPGRADE UTAH’S COMMUNICATION SYSTEM WILL SPUR ECONOMIC DEVELOPMENT AND IMPROVE EDUCATI

SHARE AN ELECTRONIC STATE: `A VITAL LINK': US WEST SAYS ITS PLAN TO UPGRADE UTAH’S COMMUNICATION SYSTEM WILL SPUR ECONOMIC DEVELOPMENT AND IMPROVE EDUCATI

AN ELECTRONIC STATE: `A VITAL LINK': US WEST SAYS ITS PLAN TO UPGRADE UTAH'S COMMUNICATION SYSTEM WILL SPUR ECONOMIC DEVELOPMENT AND IMPROVE EDUCATIONAL SERVICES.US WEST Communications officials say the company is ready to add its resources to improve Utah's economic development and education programs.

The company has laid out an ambitious four-year program for upgrading 48 local switching offices to digital equipment and for building a fiber optic backbone to support the company's statewide telecommunications system."Telecommunications today is as important as railroads and paved roads used to be to most areas of the state because they are providing a vital link," said Kirk Nelson, assistant vice president and director of external affairs. "Telecommunications is becoming the great equalizer for economic development and improving education. This plan will make Utah an all electronic state."

The US WEST effort will require a $100 million investment and company officials say the best way to raise the money is to implement an incentive-based rate plan that would freeze telephone rates for the next four years and allow the company's earnings to exceed the currently allowed rate of return for investors, with anything over a specified rate to be shared equally between investors and ratepayers.

Nelson said the incentive plan is an innovative effort that will spur investor participation while assuring customers that rates will not increase. He said the plan essentially shifts all financial risks to the investors. And, if everything works, the customers could realize additional savings through the profit-sharing element of the plan.

Over the past few years, public service commissions around the nation have approved 20 incentive plans. Fourteen others, including the US WEST proposal, are under consideration.

"We see it as a method to further improve productivity and efficiency within the company," Nelson said. "It's an incentive approach that will benefit both the company and our customers."

Opponents view the plan as an effort by the company to reverse a three-year trend that has seen company rates drop by 29 percent. They say further decreases are in the offing and would be thwarted if the incentive plan is approved.

Nelson disagrees and notes that US WEST's authorized 11.8 percent rate of return for Utah shareholders is the lowest in the United States for a Bell company. He said such a low rate of return will discourage shareholder investments and substantially slow efforts to improve the statewide system. The likely result is that earnings will level off and with that leveling will come an end to the efficiencies and productivity that has spurred rate reductions over the past three years.

Most hurt will be rural areas of the state where local officials are clamoring for the kinds of telecommunications capabilities presently available only along the Wasatch Front in Utah. They say the lack of modern electronic switching hinders efforts to attract new industry and other elements intended to stimulate economic development. As one official noted, the lack of modern telecommunications capabilities eliminates whole segments of the industrial marketplace from recruitment efforts.

If the plan wins approval- and that process begins April 27 with the first hearing before the Utah Public Service Commission - the first phase of the plan would begin construction. The 1990 efforts include upgradeddigital switching for central offices in Park City, Kanab, North Ogden, Tooele and Grantsville. The plan also calls for a fiber optic line to be installed between Salt Lake and Wendover.

Between 1991 and 1994, the fiber optic lines would spread north to Brigham City and Logan and south to Provo, Ephraim, Richfield, Beaver, Cedar City and St. George. Eastern extensions would run to Price and Vernal. Along the way, central switching offices would be upgraded with the digital equipment.

Should the plan fail to win PSC approval, Nelson said the company would simply continue to use the traditional approach, waiting for customer demand to spur consideration. Customers wanting the upgraded services would finance the improvements through higher rates.

"We see this as a win, win, win situation," Nelson said. "The company wins because we are able to attract new investments with the higher rate of return. Cities, counties and the state win because it will help build an infrastructure that will help economic development efforts, and customers win because rates will not increase for at least four years, and there may even be some revenue sharing."

Another bonus will be benefits to Utah education, Nelson noted, a focal point of concern in the state in recent years. The improved communications link will allow better use of teaching resources through audio-video links with remote locations, improved access to information networks and services, and improved teacher training without costly travel.

Nelson said improving telecommunications is not only important for the state, it is also important for the country as a whole. He said futurists believe that those countries that control the rapid exchange of information in the next century, will also control the world's economic future. Without substantial support at both the state and federal level, the United States could find itself in a difficult situation, he said.