Settlements and Verdicts

Phone Bill Reduction

Helena, MT: (Apr-30-08) Public Service Commissioner Ken Toole brought a lawsuit against Qwest Communications, a company that serves about 300,000 customers in MT, alleging that it overcharged consumers in the state. The suit claimed that Qwest, the dominant telephone company in MT, was exceeding its allowed profit in the state. Sources involved with the proceedings said that the two sides have reached a tentative settlement, in which Qwest Communications is offering a $16 million reduction in customers’ bills to resolve allegations. Sources said that the settlement, which stems from a complaint Toole filed in 2006 when he was running for office, will need the approval of the rest of the commission. Toole said he will exclude himself from the vote.

Officials estimated that the $16 million reduction in rates means the company will make about 9% return on its investments instead of an estimated 21%. They said that the lower figure is more appropriate for a regulated utility. Under the proposal, basic residential rates would drop $2 per month, while business basic rates would be reduced $3.94. Other charges would be reduced, so a customer could see a reduction as large as $12.41, depending on the type of service used. [MISSOULIAN: QWEST OFFERS TO SETTLE COMPLAINT FOR $16M]

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