Qwest Communications International wants state legislators to take the shackles off what it can charge its customers for basic telephone service.
A bill sponsored by Rep. Fred Hunsaker, R-Logan, would allow the telephone company to set the price for its basic land-line phone service based upon what the market can bear rather than the current state cap of $11 a month.
Qwest's $11 monthly rate in Utah is the lowest in its 14-state operating territory, Hunsaker told the Senate Transportation and Public Utilities Technology Committee earlier this week. "And it hasn't been increased since 1998," he said.
Jerry Fenn, Qwest's Utah president, told senators that consumers now have a variety of choices when it comes to telephone service, including inexpensive wireless and Voice over Internet Protocol (VoIP). And the market for cell-phone service is now twice the size of the land-line market in the state.
"What we're asking for is that you remove this price cap on basic residential service, to allow the market to operate, and to allow us to price services based upon the market and in response to a competitive environment," Fenn said.
Although Qwest has been able to freely set prices for most of its telecommunication products in Utah for years, the regulation of basic telephone service remained in place because few believed there was any competition for that particular service.
Some continue to argue that remains the case.
"We agree we all see the level of competition that is out there for telecom, but it does not exist for this basic residential service," said Michele Beck, director of the Committee of Consumer Services. "There are no other offerings out there where you can spend about $20 and have unlimited [local] phone calls."
Beck said the committee that serves as the voice for residential and small business in utility matters doesn't oppose HB216, but it nevertheless wonders if the price of the basic service will rise.
And that is particularly worrisome for Betsy Wolf, a low-income advocate with the Salt Lake Community Action Program.
Wolf told senators that telephone service represents a lifeline for many people, such as the elderly and the disabled, and that it is important it remain affordable. She pointed out that many elderly people balk at using cell phones and that to use VOIP technology, a person needs a computer and an Internet connection.
Hunsaker pointed out that those with low income can get a "measured" service that gives them 180 minutes of outgoing calls and unlimited incoming calls for $9.23 a month. He also pointed out that the Public Service Commission would retain the authority to revoke the pricing flexibility.
The bill was passed out of the Senate committee on Wednesday with a unanimous vote and a favorable recommendation. It now will be considered by the full Senate. The bill earlier was passed by the House on a 73-0 vote.