COMMISSION NEWS |
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ARIZONA CORPORATION COMMISSION |
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TO: EDITORS, NEWS DIRECTORS |
DATE: August 28, 1997 |
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FOR: IMMEDIATE RELEASE |
CONTACT: Jon Poston, (602) 542-0843 |
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CORPORATION COMMISSION SETTLES TELEPHONE LAW SUIT |
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The Arizona Corporation Commission today approved an out of court settlement agreement with US West Communications. Business and residential access lines will be increased by a 25 cents per month surcharge. The surcharge for low-income customers will be capped at 10 cents a month. These surcharges are temporary, and will expire in approximately two years. Corporation Commission Chairman Carl J. Kunasek said, "This was the best thing to do, given the circumstances. The Commission had already lost this case in the courts once." Kunasek went on to say, "Our choices were to reargue the very same losing case in front of the very same court, or settle a $62 million dollar lawsuit for $34 million. Simple decision for me." Commissioner Jim Irvin said, "I do not want to take risks with the consumers pocketbook. It is time to support good policy, regardless of politics. The interests of consumers must be first. Those who push for more litigation are more interested in saving face than saving consumers money." Irvin added, "Had the previous Commission handled this matter properly, we would not be voting on a settlement agreement today." In the lawsuit settled by today's decision, US West sought $62 million. The settlement calls for US West to collect $34 million. The Commission staff, the Residential Utility Consumer Office, and representatives of US West developed the settlement approved today. The Commission's legal and utilities divisions recommended settlement of the pending lawsuit. Other surcharges approved in the settlement included an additional 13 cents on Directory Assistance calls, increasing the charge to 60 cents. Analog Private Line (an example would be a telephone line that lets a business have a local telephone in another city), Direct Inward Dialing (a system that allows customers to call directly to an individual telephone number served by a PBX system), and Inside Wiring charges will also be impacted by a surcharge. The surcharge is effective October 1, 1997. Background US West filed a rate increase request in July of 1993. After public comments and hearings, the Commission decided the matter on January 3, 1995. In that decision, the Commission ordered $17 million in Yellow Pages revenues be used to reduce customer rates. US West appealed, and the Arizona Court of Appeals upheld the telephone company, saying the Commission did not provide the appropriate mechanism for US West to collect $17.6 million in revenues. The Court sent the case back to Commission for reconsideration. In June of 1996, the Commission authorized US West to collect the $17 million from users of private line telephone service. US West appealed that decision, and this appeal, which is being settled by today's decision, is scheduled for hearing on September 3, 1997. |
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