My understanding, however, is that the deregulation issue was not related to internet services.

Qwest has failed to honor its contractual obligation to upgrade rural telecommunications in New Mexico, yet still retains the benefits of a virtual monopoly in most of the state.

While Qwest continues to seek rate increases – both openly acknowledged rate increases and hidden price hikes, as in the case of HB 107 – it has failed to meet at least $200M of its upgrade commitment, and reduced its costs by reducing service quality, refusing to expand service areas and laying off employees.

At the same time, our tax dollars are being deployed to pay for Qwest’s service shortfall. For example, $10 million of federal stimulus money will be used to provide broadband Internet access to 4,700 square miles of the Penasco Valley.

Do the math: Qwest owes us 20 times this amount. Were Qwest to honor its contract, at this rate broadband Internet could be provided for over 94,000 square miles of rural New Mexico (the entire state is only 121,593 sq mi), and these 10M tax dollars could be spent on other equally urgent projects in New Mexico.

If this is the service level Qwest provides under at least some constraints of regulation – remember the multi-day, multi-county service outage in December? – then I can’t imagine how bad it would get without regulation.

So I wholeheartedly support Jason Marks’ attempts on the PRC to protect all the consumers of New Mexico, including us country folk living on the wrong side of the digital divide.

Qwest Corporation bought U.S. West in 2000, with the full knowledge that it was acquiring highly regulated telephone companies in New Mexico and other states. It chose to be in this business model. And thus, it has no entitlement to deregulation as a matter of fairness.

Today, technology permits cost-effective competition for telephone services in many markets. As a matter of economic efficiency (not fairness), we ought to move regulation of companies like Qwest to a market-driven model in those competitive markets. This is possible under the existing NM statutory framework, and I would like to see such initiatives move forward. What Qwest appears to desire, however, is across-the-board deregulation that will leave it as an unregulated monopoly in many geographic/service category markets.

To put it another way, Qwest says it wants to compete. Well, companies in competitive markets that want to keep or increase market share do so by offering more value through things like better quality of services, lower prices, and/or new and better services. Qwest doesn’t need the law changed in order for it to offer better quality or lower prices, the only things it really needs a law change to do is charging more than the PRC would allow, providing lower quality of service, or making smaller investments in new services.

You argue that higher prices for basic residential service (a non-competitive service statewide today) and worse service for rural areas may be justified, and while there may be something to that point of view, why shouldn’t consumers be entitled to continue to receive the benefit of the regulatory bargain that was struck long ago? Is the theory behind sanctity of contract only applicable when it benefits a large corporation?

We should continue to use an evidence-based approach to determining when sufficient competition has arisen (or is possible) in the various urban and rural markets in our state, and at that point, remove price and quality of service regulation for those competitive markets.