by Stan Shaw

OPINION Operator, Please! This is an emergency. Won't someone--anyone--take US West off our hands?

For the past few months, staff members at the Mercy Medical Center in Roseburg have been getting "all circuits busy" signals when they've tried to use the telephone. The problem, according to provider US West, is that state regulation has prevented appropriate infrastructure investments in Roseburg and other parts of rural Oregon. Hogwash. The fact is, US West has had both the resources and the opportunity to build all the telecommunications infrastructure rural Oregon needs. Seven years ago, the Oregon Public Utility Commission entered into an agreement that allowed US West to earn a higher rate of return than the monopoly otherwise would have gotten. In return, Oregon was promised improvements in local phone service. US West's promises went mostly unkept. Rather than reinvest some of the profits where they were generated, the phone company chose to pump them into a series of less-than-spectacular investments in cable companies around the globe. It spun these investments off last summer into a new company called MediaOne. So today, while emergency-room personnel in Roseburg find basic service dangerously unreliable, residents of Park LaBrea in Los Angeles have available what a company press release deems "the largest offering of its kind in the country where one apartment community can receive, with one phone call to their leasing office, MediaOne's Digital Telephone Services, MediaOne's NexTV advanced analog cable television service and MediaOne Express, a high-speed Internet access service." This legislative session, US West once again is asking for permission to generate higher profits, this time under the guise of promised investments in rural Oregon. Last Friday the Senate Business and Consumer Affairs Committee passed SB 142, one of the most outrageous government giveaways ever proposed in Oregon. In return for the promise of infrastructure investment in rural Oregon, the bill would effectively eliminate oversight of the company by the Oregon Public Utility Commission. Along the way, it would make it more difficult for serious telecommunications competitors to enter the Oregon market, end financial incentives to provide decent service and provide US West a multimillion-dollar bonanza. SB 142 would accomplish the latter result by significantly reducing the benefits to customers of a rate case currently under review by the Oregon Court of Appeals. This is happening at a time when US West is generating an estimated $103 million in profits on some $560 million in revenues from its Oregon operations--a whopping 54 percent increase over its more-than-adequate financial performance in 1997. No wonder Merrill Lynch rates the company's stock "ACCUMULATE." In a more sensible time, the giant phone monopoly would be laughed out of Salem on the heels of so ludicrous a proposal. Joan Smith, perhaps the most tactful and cautious of the three Oregon public-utility commissioners, is staggered by the company's brass, as well as by the possibility SB 142 may eventually become law. "I wish they'd admit they just don't care about Oregon," Smith told us last week. "All you have to do is look at the facts and look at the numbers. If they'd reinvested properly, we wouldn't be having this conversation now. Rural Oregon is being used as a key lever to get this through. "It's just about profits and the art of the deal," Smith concludes. "I wish someone would buy them." At this point, so do we. - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - - Willamette Week | originally published March 17, 1999