April 15, 2002

Contact: Bob Bruce, 503-725-5700
Source: Tim Johnston, 503-725-2776

Persistence Brings Phone Service Refunds for Oregon Business

PORTLAND - Oregon's business and public sector communities will soon see refunds of more than $6.9 million from Qwest for past overcharges of a statewide, regulated telephone service, thanks to the combined efforts of a telecommunications user group and three public university employees.

The refunds come from extended proceedings of a rate case first filed with the Oregon Public Utility Commission in 1997. In that case -- after lengthy proceedings through the courts and the 1999 Oregon Legislature -- the Commission ordered U S West, now known as Qwest, to refund more than $270 million to Oregonians for overcharging various services.

As part of that settlement, many Oregon companies and public sector agencies were entitled to sizeable refunds for various complex telecommunications services including a service known as ISDN PRI. This particular service uses a technology that basically allows companies to compress the equivalent of 23 analog telephone lines into a digital line that connects the customer's telephone switching system to the local phone company, in this case Qwest.

But refunds were issued in Fall 2000 for the three largest Oregon University System campuses, three state employees noticed the amounts were far less than expected. Campus telecommunications directors Dave Barta at the University of Oregon, Shay Dakan at Oregon State University and Tim Johnston at Portland State University discovered computational and administrative errors that led them to question Qwest's refund methodology and the PUC's proceedings in the original rate case.

Working closely with the Telecommunications Ratepayers Association for Cost-based and Equitable Rates (TRACER), a statewide organization made up of public and private business users of regulated telecommunications services, the OUS telecommunications directors prepared a formal complaint. TRACER filed the complaint with the PUC in December 2000. After months of testimony and negotiations, a settlement agreement was reached and submitted to the PUC in September 2001. Final PUC approval was granted in February.

Under the settlement, OUS campuses and Oregon Health & Science University will receive some $450,000 in credits against future billings. And other Oregon public and private businesses who use the more than 1,900 ISDN PRI lines provided by Qwest in Oregon will receive nearly $6.5 million in refunds.

"The real beauty of all of this is that if we hadn't discovered the mistake in the first place, and then filed the formal complaint with the PUC, no one would have even known this refund error had happened," says Tim Johnston, one of the OUS telecommunications managers who initiated the additional investigation into the refund proceedings and methodologies of the original rate case.

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