Consumer Counsel office wants customer protections spelled out before deal closed

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— The Colorado Office of Consumer Counsel is concerned that U S West's sale of telephone lines in 17 rural communities to Citizens Communication isn't as sweet a deal as both companies would have customers believe.

Telephone lines in Yampa and Oak Creek would be included in the sale, which is expected to be completed by February.

The Office of Consumer Counsel is a state agency that represents the rights of utility users in rural areas.

The 17 exchanges U S West wants to unload, equaling about 45,000 access lines, have a history of being poorly maintained, said Ken Rief, director of the Office of Consumer Counsel. For example, there is a relatively high number of "held" orders in the 17 areas meaning there are customers waiting for their phones to be hooked up long after they expected to be dialing.

"It was nothing but held orders," south Routt resident Mark Arnold said of his U S West experience.

About five years ago, Arnold opened Colorado Mountain Net, an Internet service provider, in Oak Creek. After starting the company, Arnold ran into problem after problem with U S West's commercial service, he said. He has since sold the business but said he once again encountered problems trying to get a residential line hooked up at his new home.

"We had to jump through 10 million hoops," an exasperated Arnold said.

To protect customers, U S West is required to follow a service quality plan that is regulated by the Colorado Public Utilities Commission.

The plan gives the PUC power to reimburse customers with U S West money, up to $15 million statewide, if they don't receive the minimum level of service required by the commission. It is an incentive for U S West not to forget about the rural areas where profits are significantly lower.

Under Citizens' proposal to buy the lines in Colorado, the new company would not increase fees for six months and once it did, the increase would be limited by a fee cap. However, the purchase proposal does not include a service quality plan, said Phor Nelson, a rate analyst for the Office of Consumer Counsel.

"That does raise serious concerns with us," Nelson said. "We're looking to get some assurance on some improvements that (Citizens) is going to make. Citizens position is basically, 'Trust us.'"

Martha Alcott, a spokeswoman for Citizens, said May 26 that she couldn't comment on the service plan issue because the person in charge of the Colorado sale was on vacation.

However, Alcott did say that Citizens' niche market is rural areas and the company owns several exchanges in Western states.

The Colorado sale is part of a $1.65 billion deal in which Citizens is acquiring 530,000 access lines, mostly in rural areas in 14 states.

"We see a huge growth potential in these areas," she said.

Since the company doesn't compete in urban areas, it can concentrate on giving its rural customers good service, Alcott said.

By many accounts, that's something U S West had a hard time doing.

U S West spokeswoman Bonnie Pehl-Peterson said federal regulations are causing her company to lose money in rural areas. Additionally, since U S West is limited by law as to how much it can charge its customers, it doesn't have the flexibility it needs to raise rates to a level where it would make financial sense to improve service in rural areas, Pehl-Peterson said

"We felt that another company would meet the needs better than we can at this time," she said.

One stipulation of the deal between U S West and Citizens is that Citizens claims it will be able to provide high-speed Internet access to rural areas.

The company has given its current customers in Middletown, N.Y., and Elk Groove, Calif., a high-speed Internet product and Alcott said the plan is that, one day, all Citizens customers will receive similar service. But, she cautioned, nothing is for sure.

"We're not at the point that we're promising it in the property that we're buying," Alcott said, referring to the 530,000 access lines Citizens has its eyes on.

Other enhanced features like, caller identification, call waiting and call waiting with caller I.D. could be offered to. However, nothing new would be offered until the company was able to assess the need of each community, Alcott said.

Arnold, who has made his living with the Internet, speculated that affordable, high-speed Internet access may have come a lot faster to south Routt with U S West. One of the reasons the big phone company is selling the rural lines, he believes, is because it doesn't want to have to be required by the PUC to improve Internet access.

"Not to be pessimistic, but I really don't see where this is going to be any advantage," Arnold said of the sale to Citizens.

Arnold said there is a need for high-speed Internet access at a reasonable price in south Routt if residents want to draw more business to the area.

"If you don't have high-speed access, you're a Third World region," he said. "And most Third World countries are getting it before we are."

To reach Doug Crowl call 871-4206 or e-mail dcrowl@amigo.net

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