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News Release
U S WEST Fails To Provide Planned Infrastructure Investments
March 1, 1999 (1999-011)
Contacts: Ron Eachus, Commission Chair, 503 378-6611; Joan H. Smith, Roger Hamilton, Commissioners, 503 378-6611; Ron Karten, Public Information Officer, 503 378-8962
Salem, Ore. – The Oregon Public Utility Commission (OPUC) today said that U S West Communications Inc. has failed to follow through on plans in its 1998 construction budget for investments that would have improved service in some rural areas, including La Grande and Oakridge.
In reviewing U S WEST’s 1998 activities, the OPUC staff found that the company had not spent the money it budgeted for a $1.9 million upgrade for the Pendleton to Baker City digital radio connection and a $600,000 upgrade of the line between Springfield and Lowell.
The Pendleton/Baker City project would have solved service problems in the La Grande area and the Springfield/Lowell project would have improved service to Oakridge. Both communities have been vocal about the lack of adequate service opportunities in their area.
"It’s pretty suspicious that they withheld these planned investments at the same time they’re threatening rural Oregon that they won’t invest unless they get to earn unlimited profits on their monopoly," Commission Chairman Ron Eachus said.
U S WEST is supporting legislation, SB 142, which would overturn a 1997 OPUC rate case which ordered a $97 million, or 16%, rate reduction and $102 million refund. Under the bill, U S WEST would put $30 million a year for four years into a telecommunications infrastructure fund and would be freed from any regulation based on its profits.
The Commission has opposed the bill because the rate case is still on appeal in the courts and because it doesn’t guarantee any additional money for rural areas than what U S WEST might otherwise have spent.
"U S WEST would have to make the investments for La Grande and Oakridge anyway," Eachus said. "The company can withhold the investments now and use it as part of its contribution later. Meanwhile, the ratepayers lose their refund and U S WEST gets unlimited profits without any oversight."
Future capacity problems in the Pendleton-Baker City area dictate the need for facility investment, but the lack of investment affects other communities as well. Even though La Grande is served by GTE, the area’s capacity is restrained by the U S WEST facilities in the Pendleton-Baker City area because so many of La Grande’s calls go through those lines. Likewise, the problems in Oakridge are caused by limited capacity further up the line, specifically between Springfield and Lowell.
"Failure to make the investments is not due to lack of earnings and profits but decisions over time to take so much out of Oregon that the company does not have what’s needed to modernize its network," said Commissioner Roger Hamilton. "This diminishes the communications power not only for these two communities but for all of us who are part of the network."
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