Let's see if we've got this right: Just when a questionable
outfit has announced its intention to merge with US West,
the Oregon Legislature is hell-bent on gutting the state's
Public Utility Commission.
On Monday, Global Crossing Ltd., described by The New
York Times as "an acquisition-hungry telecommunications
upstart," and US West, the 14-state behemoth that provides
dial tones to most Oregonians, announced a complex stock
swap.
According to a US West press release, the $37 billion deal
would "create a seamless end-to-end local-to-global broadband
network." Looked at more objectively, the proposed Global
Crossing-US West merger raises far more telecommunications
questions than solutions. Wall Street certainly failed to
see the wisdom of the deal, as shares of both companies
dropped in the wake of Monday morning's announcement.
Why should anyone place much confidence in this deal? After
all, Global Communications is less than two years old; is
headquartered in Bermuda but has offices--and all of 148
employees--in Beverly Hills; and is the creation of financier
Gary Winnick, the former associate of junk-bond crook Michael
Milken. Last year, Global Crossing lost $88 million on revenues
of $424 million, while US West, by contrast, made $1.5 billion
on sales of $12 billion.
Here in Oregon, two Republican legislators have joined
the Legislature's multifaceted attack on the administrative
body charged with, among other things, getting us good phone
service at reasonable rates.
As part of a package of "reforms," Republican state Reps.
Jim Hill and Tom Butler are pushing bills that would ax
pay for public utility commissioners and would merge their
operations into another state agency. The zero-pay provision
would remove the three current commissioners, while the
agency merger would go a long way toward diluting the expertise
of PUC staff.
Hill's and Butler's bills are in keeping with much of the
utility legislation that has emerged this session. SB 142,
for example, has already passed the Senate. It is an ill-informed
effort to deregulate local phone service and take back from
customers much of the benefit of a rate case currently pending
before the Oregon Court of Appeals. A companion bill would
remove all benefits currently flowing to consumers from
US West's lucrative Yellow Pages operations.
During the past decade, no Oregon utility has behaved as
badly as US West. At the same time, no state agency has
done more to protect the general public than the PUC.
In a rational world, the Oregon Legislature would be all
over US West--and would be throwing its wholehearted support
behind commissioners Ron Eachus, Joan Smith, and Roger Hamilton
and their staff. In Salem's Republican-dominated never-never
land, however, Senate President Brady Adams and House Speaker
Lynn Snodgrass oversee a majority that ensures no good regulatory
deed will go unpunished.
Maybe--just maybe--Global Crossing's sudden arrival on
the scene will give the Legislature a much-needed jolt.
Now more than ever, the phone company cries out for increased--not
castrated--regulatory oversight.
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Willamette Week | originally
published May 19, 1999 |
