The Battle is On!

You see it every month on your bill: Qwest’s $12 per month “distance charge” per wired phone line, an established yet outdated tariff for Qwest telephone service. This charge was put in place years ago and was intended to compensate Qwest for the greater expense of providing service to “rural” customers.

Ten or twenty years ago this may have made a lot of sense. Today, however, it is obsolete. Want to know more about why this fee exists?

Here are the steps Castle Pines North has taken in the fight against “distance” charges (in chronological order):

Early 2002: Some CPN residents filed a complaint against Qwest with the Colorado Public Utilities Commission (PUC) attempting to eliminate distance charges. Qwest received the complaint and decided to not yield on the tariff.

August 2002: There was a pre-hearing conference held at the PUC regarding the charges. Once again, Qwest refused to give on the issue. The PUC advised CPN’s committee to acquire an attorney.

September 2002: The CPN Master Association Board agreed to fund a retainer for an attorney specializing in telecommunications law.

October 2002: CPN’s attorney and committee started negotiating with the PUC staff to review the tariff.

2003: The fight continues! Developments Mean there is Still Hope… CPN’s committee has learned that this obsolete tariff structure affects many neighborhoods throughout Colorado, not just Castle Pines North. CPN’s committee and attorney are currently working with PUC staff to have them review the statewide implications. While nothing is guaranteed, we are hopeful that this will lead to a solution for CPN residents and reduce the financial burden of tackling the issue on our own.

During the course of the review, the PUC may hold public meetings. When the dates and locations for these meetings are announced we will let everyone know via this web site and via e-mail alert (Sign up for the E-mail Alert List – it’s easy to join).

What is the “Distance Charge”?

You are probably quite familiar with the $12 per month “Distance Charge” on phone bills in Castle Pines North. Many residents ask, “haven’t we paid this long enough to cover whatever cost there was of bringing phone service into the area?” In reality, the Distance Charge is not related to paying initial infrastructure costs and there is no “time limit” to the fee. The Distance Charge is part of Colorado’s ongoing phone-system rate structure, and it won’t go away until we win our battle to have it eliminated.

The “Distance Charge” (also known as “Zone Charge”) is part of the established tariff for Qwest’s telephone service which was put in place years ago and was intended to compensate Qwest for the greater expense of providing service to customers located further from the telephone company’s central office (ours is in downtown Castle Rock). The logic goes something like this:

Central offices are built near centers of population.
Providing service (primarily the necessary wiring) close to the central office, in the relatively densely populated area, is relatively inexpensive on a per customer basis.
Providing service farther away from the central office, in sparsely populated (rural) areas, is relatively more expensive per customer.

That was all well and good 10 or 20 years ago and in fact made a lot of sense. It truly was more expensive for the phone company to provide service to folks who lived “out in the country” as compared to folks who lived “in town.” Today, there are a number of factors having to do with both technological advances and demographics that render this model generally obsolete and, in the case of Castle Pines North, ludicrous.

One of the most important changes is that, when the current rate structure was designed in 1991, everyone assumed that any new population center would always have a central office and thus become the center-point for a new rate zone. However, technology has changed to the point that there have been NO new central offices built to serve new residential areas – now, the new areas are served by extending “fiber optic” lines from existing central offices.

This means that many of the new subdivisions built around the state in the past decade are facing the same challenge as CPN. We know that zone charges also affect Roxborough Park, portions of Saddlerock (east of E-470), portions of The Broadlands in Broomfield, and there are likely many other subdivisions affected.

The Zone Charge applies to Qwest and to the “competing” phone carriers; the PUC regulations about rate tariffs are very complex but the bottom line is the companies currently offering wired phone service in our area are also covered by the same rate tariff. Some residents that obtain service from a phone company other than Qwest may have a phone bill without the Distance Charge, however in these cases it’s a billing error.

Last year some of our neighbors filed a complaint against Qwest with the Colorado Public Utilities Commission (PUC) attempting to eliminate this charge. Qwest argues that the existing rate structure requires the Distance Charge, and no special consideration can be given to CPN. There isn’t a quick, simple solution for CPN. The Master Association has hired an attorney with expertise in telecommunications regulation to help our committee as we continue to pursue a solution.

Related Information:
Read the Denver Post Article
Read the Rocky Mountain News article
Read the PUC PRESS RELEASE