GTE will not receive an exemption from competition for being a rural phone company, Idaho public utilities commissioners ruled Monday.
That opens the door for competitors to offer local phone service in North Idaho, which now is served entirely by GTE.
Three companies have been approved by the state Public Utilities Commission to compete in the area; all are negotiating agreements with GTE to use its lines. Eleven others have applications pending.
“I’ve got to say I’m disappointed,” said Carol Rutgers, GTE external affairs director for Oregon and Idaho. “As competitors come in, they are going to be targeting business customers. I don’t think residential customers in North Idaho are going to immediately see a lot of choices from other competitors.”
One company, GST Telecommunications, already is planning to offer businesses in Coeur d’Alene and Post Falls an array of phone, long distance, data transmission and Internet services.
AT&T; wants to offer all types of phone service, not only in North Idaho but nationwide.
GTE argued that many of its North Idaho customers are in remote areas that are expensive to serve. Federal law deregulating local phone service allows rural companies special exemptions from competition to preserve phone service to everyone.
But the PUC ruled that when looking at GTE, it couldn’t look just at its Idaho operations. GTE Northwest, which also includes Oregon and Washington, is the company that must fit the “rural” definition, commissioners wrote. Based on research by PUC staff, the commission ruled GTE Northwest didn’t qualify.
There will be a time lag before the competition shows up. GTE has just begun interconnect negotiations with GST and Citizens Telecom. Its talks with AT&T; broke down earlier, and an arbitration session has been scheduled for July.
Eileen Benner, assistant vice president of AT&T; in Idaho, said: “We’re just real pleased that this only impediment to our moving ahead with negotiations with GTE is settled.” AT&T; should be offering local phone service in North Idaho by 1998, Benner said.
Rutgers said GTE has invested $200 million in equipment in North Idaho in the past six years, eliminating all party lines and making its service 100 percent digital.
“GTE is certainly hoping to provide quality service to its customers on a continued basis,” Rutgers said.
Joe Cusick, a PUC telecommunications official, said urban customers will benefit more from competition than rural folks.
That’s because urban areas with more phone lines are more profitable to serve than remote residences.
Said Rutgers, “If our competition is going to those large business customers, somebody has to continue to support the infrastructure that is in place.” Either the competitors will have to help, or “the burden comes on the existing ratepayer, and that will be the residential customers.”
Details of how much competitors will pay to use GTE’s lines will be settled through negotiations or arbitration.
Rutgers expects to see lots of “niche” competitors come to North Idaho, targeting just pieces of GTE’s customer base.