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News Release
 
Commission Approves New Rates for QWEST Communications
 
September 14, 2001 (2001 - 033) (UT 125)
 
Contacts:  Roy Hemmingway, Chairman, 503 378-6611; Joan H. Smith, Commissioner, 503 378-6611; Lee Beyer, Commissioner, 503 378-6611; Bob Valdez, Public Information Officer, 503 378-8962
 
Salem, OR –The Oregon Public Utility Commission today approved a new rate design for Qwest Corporation (Qwest) that reduces annual revenues by $64.2 million dollars. The long-awaited order also sets price caps for nonbasic telecommunication services, as required by Senate Bill 622. Consumers will also receive reduced and simplified toll rates for long distance calls within Qwest's Oregon service area. The new rate design will be effective January 1, 2002, to give Qwest enough time to make the appropriate changes to its billing system.
 
There will be three rate groups based on the cost of providing service. Under the new rate design for residential customers, the $12.80 monthly local service flat rate will remain unchanged for the 92 percent of customers in group 1. The group 2 monthly local service flat rate will increase by $1 and the group 3 rate by $2.
 
Qwest had proposed a $1 increase in group 1, $2 in group 2, and $3 in group 3.
 
In addition, customers' extended area service (EAS) rate will be reduced by $11 million annually. Extended area service eliminates long distance charges for calls placed within EAS areas.
 
"We tried to spread the rate increases equitably among customer classes. Customers will be better off when you take into consideration the combined reductions in EAS, long distance tolls, and features," Commission Chairman Roy Hemmingway said. "The effect of this order is an overall reduction of Qwest's annual revenues by $64 million. "
 
In-state long distance rates will be simplified to include two rates--peak and off peak. The new peak long distance rate will be set at 11 cents per minute; the new off peak rate will be 7 cents per minute.
 
The order also sets price caps for a host of nonbasic features such as call waiting, caller I.D., and call forwarding. The price caps will result in lower prices for these services. The order also includes price reductions for various business services.
 
In addition, the order will reduce access charges. The access charge is what Qwest charges long distance providers to use its network.
 
The Commission initially issued its revenue reduction order in 1997. The company challenged it in court. It was also an issue in the 1999 Legislative session. A stipulation reached in April, 2000, provided a $284 million refund and temporary bill credits. The temporary bill credits of $2.47 a month will cease as a result of the Commission's rate design order. The stipulation settled phase one of the rate case. Phase two involved the rate design and setting of price caps.
 
In addition to staff and Qwest, numerous other parties took part in the proceedings including (AARP), the Citizens' Utility Board (CUB), AT & T Communications of the Pacific Northwest, MCI Worldcom, Verizon Communications, and Telecommunications Ratepayers Association for Cost Based and Equitable Rates (TRACER).
 
 
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