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Qwest’s deregulation of rates is one step away

Chuck Oxley Associated Press

BOISE – Qwest Communications Inc. is again one step away from getting a law passed that would deregulate residential landline telephone service in Idaho.

The House bill passed the Senate State Affairs committee Wednesday 5-4, and now goes to the full Senate.

The controversial bill represents the company’s latest attempt after several years of trying to deregulate telephone prices, but its chances improved March 7 when former state Sen. Jack Noble resigned in an ethics scandal. Last year, he cast the final dissenting vote to defeat the bill.

Although the Senate has a handful of other new members, the final outcome is far from sure.

The bill would allow Qwest’s residential landline telephone rates to increase about 10 percent a year for the next five years, with a maximum allowable rate of $24.10 by 2010. The legislation does not apply to cell phones or other types of communications options, which are already unregulated.

Company officials contend that they need price deregulation so Qwest can compete with wireless and Internet-based communication services that are flooding the market with low-priced alternatives to traditional residential services. The bill was supported at the hearing by the Idaho Association of Realtors.

Opponents at Wednesday’s hearing included the Idaho Community Action Network, an advocacy group for low-income people, the Catholic Diocese of Idaho, a number of local residents and a The Common Interest, a citizen’s watchdog group.

“When our members reviewed the best evidence available on the level of competition for landline service, they overwhelmingly judged that competition to be insufficient to warrant price deregulation,” said Keith Allred, founder and president of Common Interest.

This year’s legislation also includes features that were not in the previous version, such as a 3- to 5-year transition period to a total free market, a provision that ties rural phone rates to urban prices, and even an unrelated “anti-slamming” clause that would prevent Qwest from acting as a collection agent on third party accounts.

Senate President Pro Tem Bob Geddes, R-Soda Springs, opposes the bill, saying he wasn’t sure that allowing Qwest to raise rates was any way to make them more competitive.

But Bart Davis, the Senate’s No. 2 Republican leader, supports the bill, saying it is a good opportunity to take advantage of the marketplace as a check on pricing.

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