Iowa Utilities Board gave Qwest permission to geographically reba...
Iowa Utilities Board gave Qwest permission to geographically rebalance its retail basic business rates to reflect cost, revenue and market shifts arising from recent board decision to geographically deaverage Qwest’s unbundled loop rates into 3 cost zones. Qwest is…
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to file tariff with new basic business rates by end of Feb. Loop deaveraging plan adopted by board Jan. 10 will create spread exceeding $26 between lowest and highest loop cost zones. Qwest said loop deaveraging without retail rate rebalancing would create artificial wholesale-retail price disparities that would give CLECs opportunities for uneconomic arbitrage that would unfairly damage Qwest’s position in urban markets while simultaneously discouraging rural competition. Board said Qwest’s case was valid for basic business services, but it said Qwest carried argument too far when it attempted to apply same principle to residential and nonbasic business services. Retail residential rates are below lowest deaveraged loop rate, board said, making uneconomic arbitrage impossible, and company under its price cap plan already had broad pricing flexibility for optional and discretionary business services. Board limited rate rebalancing to single-line and multiline business basic exchange, business trunk services, payphone access lines, Centrex and business ISDN services. Rebalancing will reduce rates in low-cost urban areas and increase them in higher cost suburban and rural areas, but board also put 20% limit on rate increases for any particular service.