State, Us West Lawyers Argue Revenue Rollback Telephone Company Says Regulators Lacked Authority To Order Cuts
US West on Tuesday told the state Supreme Court that regulators acted improperly when they ordered the giant telephone company to cut revenues by $91.5 million.
But lawyers for the state Utilities and Transportation Commission said the commission issued the order after determining that the company could afford the ratepayer relief and still realize a good rate of return.
Phone company lawyers said the commission’s 1995 order was fundamentally flawed because the commission failed to work into its calculations that U S West must operate in a new, more competitive environment that came with federal deregulation of telecommunications.
State lawyers countered that US West failed to present any facts to support the contention that it needed more revenue to compete. Indeed, the state asserted, the phone company was a monopoly in 1995 and remains so today.
US West is asking the court to reverse the UTC order after taking into account the competitive environment in which the company must operate.
The high court gave no indication of when it might rule.
US West, which is appealing a lower court ruling favoring the UTC, told the court that the commission incorrectly figured US West’s expenses and income when it ordered the telephone company to cut its revenues.
Among other things, the lawyers said, the state incorrectly calculated the company’s operating expenses, unfairly included revenue from the Yellow Pages subsidiary in its profits, miscalculated how fast the company’s equipment depreciates and disregarded its cost studies.
State lawyers countered that the calculations were grounded in facts, not in the company’s own speculation about its potential losses due to competition.
Meanwhile, US West in May asked the commission for another residential telephone service rate increase, contending it didn’t make enough money in Washington last year.
The increase, if approved by the state Utilities and Transportation Commission, would raise residential rates about $2 a month and bring in an extra $50 million for US West.
The UTC is still studying the request.