US West faces state government fire

Prompted by growing customer complaints, New Mexico regulators are poised to open an investigation of US West that could potentially undermine the company's right to operate in that state.

John Borland Staff Writer, CNET News.com
John Borland
covers the intersection of digital entertainment and broadband.
John Borland
3 min read
Prompted by growing customer complaints, New Mexico regulators are poised to open an investigation of US West that could potentially undermine the company's right to operate in that state.

According to New Mexico public utility commissioners, citizens have filed close to 1,500 complaints about the company since January 1998.

The overwhelming number of complaints has pushed commissioners to unveil their biggest weapon to try to persuade US West to change its ways. If a majority of the five-member regulatory board agrees tomorrow, it will launch an investigation of the company's business practices that could prompt the state to revoke US West's operating license.

That worst-case outcome is unlikely, even if the board does open its proceedings tomorrow, commissioners say. The investigation would probably lead to a negotiated settlement, with the chance of stiff fines or forced changes in US West's operating rules.

But the scrutiny comes at a bad time for US West, which is deep into working on its pending merger with Qwest Communications International. Shareholders are scheduled to vote on that deal November 2, and New Mexico regulators will soon take up the issue themselves.

New Mexico has long proven to be a thorn in US West's side. Company executives say that the state's strict regulatory environment, along with a sparse population and rugged terrain, have made maintaining its networks not only difficult but expensive. Customers and rivals have kept up a steady stream of complaints about the company's service quality and response time.

And New Mexico is the only state in US West's 14-state service area that does not have high-speed digital subscriber line (DSL) Internet access services. US West claims that services have been stymied as regulators have put unnecessary requirements on it and have at times requested business information it would not divulge.

"Unfortunately, in New Mexico, one obstacle is sometimes unreasonable demands put on us by the public regulatory commission," said Valerie Santillanes, a company spokeswoman.

The situation has been at an impasse for some time. Earlier this year, the state legislature voted to release US West from much of its regulatory obligations, but the governor vetoed the bill.

But the newly elected group of commissioners staffing the restructured utilities board now appears to be moving toward a more activist role.

"We have had a slew of customer complaints," said commissioner Tony Schaefer, the board member who is bringing the proposal to a vote tomorrow. "We've been concerned for some time about what appears to be a lack of investment in New Mexico compared to other states. It seemed that it was time for a new approach."

These complaints have ranged across the spectrum of service quality, from the inability to get a phone to slow Internet service, commissioners said.

"It's hard to evaluate these complaints," added commissioner Herb Hughes. "To do so, we need to assess how significant they are, and how significant an effort is being made to alleviate them. We need to have better data."

If Hughes and Schaefer do convince one other board member to vote with them, US West will have to go on the defensive. The proposed order would force the company to "show cause" why the commission should not revoke or modify its license to operate in the state--an extreme measure to which regulators rarely resort, and which New Mexico has never used before.

While the company doesn't dispute the existence of the customer complaints, it says the amount is being blown out of proportion. In New Mexico alone, it has successfully filled 637,000 orders since the beginning of the year, a spokeswoman said.

"US West has not achieved perfection," Santillanes said. "But we are successfully meeting our order requirements more than 97 percent of the time."

The company has lobbied hard against the possible investigation, noting that another proceeding with the commission will soon tackle the company's rate structure, and will address much of the same information.

This objection has also been picked up by several of the other board commissioners, who have said publicly they don't want to see two redundant series of hearings going on at the same time. Those commissioners could not be reached for comment.

But Schaefer said the two proceedings would address very different issues, adding that his rural constituents care far more about the service issues than about the long-term question of phone bills.

"Rates are rates. Service is service," Shaefer said. "If you can't get a phone, you're not going to care about what rates are."