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Telecommunications group labels Utah anti-competitive

SHARE Telecommunications group labels Utah anti-competitive

Utah is ranked as one of the most anti-competitive states in the Union by an association that represents large telecommunications-service users.

But the chairman of the state's Public Service Commission bristles at the rating, calling it "extremely premature."In a national survey by the International Communications Association, Utah is listed as one of seven states with policies that constrict telecommunications competition.

"People shouldn't have to walk over the Rockies to get to a level playing field," said Brian Moir, association counsel.

The association found interim prices set by the Utah Public Service Commission for competitors to access the telephone network built by US WEST are 52 percent higher than recommended by the Federal Communications Commission.

Only four other states, according to the association, have set temporary or permanent interconnection prices higher than Utah's, though agreements are pending in about a dozen states.

"The prices, though interim, that the Utah PSC came out with were well above what many have done around the country," Moir said. "Entrepreneurs are going to wait to make capital investments in Utah because the costs are so much higher."

The International Communications Association is a nonprofit group with 500 members who are large users of telecommunications services. Members include corporations, universities and government agencies.

The interconnection costs evaluated by the association are what competing companies must pay to access the network built by regional Bell operating companies - in Utah's case, US WEST's network.

Only three companies have interim agreements with US WEST: Electric Lightwave Inc., Phoenix Fiberlink and NextLink. Several other agreements are being refereed by the Public Service Commission.

Commission Chairman Steve Mecham said cost hearings in April, May and October on various aspects of interconnection will determine final prices.

"I would say their report is extremely premature. Therefore, I would not give it any credibility," he said. "It's like trying to predict the winner of a marathon when you're not even halfway through the race."

Mecham said prices set in nearly a dozen states are being hotly contested; 20 appeals are under way in 10 states, according to a survey of 36 states by the National Association of Regulatory Utility Commissioners.

He also faults the use of the FCC prices as a benchmark, since the Eighth Circuit Court of Appeals is hearing a lawsuit protesting the cost formula and the FCC's jurisdiction to set prices. A decision in the case is expected in the next month.

"Their benchmark is questionable," he said.

Moir, however, says that defending Utah's prices because they're merely interim "makes my point even further. How do they rationalize that a number of states have gone below the FCC pricing formula?

"What the commission is saying is that when meaningful competition begins, it's going to start occurring elsewhere before it comes to Salt Lake City," Moir said. "And competition brings a lot of things, not just lower prices - faster implementation of cutting-edge technology, higher quality, greater diversity of services."

Mecham acknowledged that Utah's interim prices are "high comparatively," but he said those costs will be balanced through refunds or recharges once final prices are set.

Mecham also anticipates a final order on prices won't be the end of debate. "I can almost guarantee that when we issue a final agreement it will be taken to federal court," he said. "There is a lot of money at stake here. There is going to be litigation over this."

Still, the commission is trying to wade through the difficult issues to reach balanced agreements.

"It is not a simple matter to move from what has been a monopoly to a competitive market," Mecham said. "It is not going as well as many wished at the time the (federal Telecommunications Act) passed. There are a lot of things to work through before we're going to be able to do a true assessment of who is competitive and who isn't."