U S West faces huge NM lawsuit

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Thursday, April 27, 2000

U S West faces huge NM lawsuit By BOB QUICK/The New Mexican

As many as 100,000 New Mexico residents could be included in a lawsuit filed Wednesday in Santa Fe District Court against U S West for failing to provide new and additional telephone service to customers.

The litigation comes after years of complaints by customers and telecommunications regulators of Denver-based U S West. Daniel Reilly of the Denver law firm of Hoffman Reilly filed a nearly identical suit against U S West in Colorado in November 1999.

"We will file another suit making similar claims in Arizona in early May," Reilly said it a statement. "That suit will be followed within days by a suit in Oregon." Reilly said the Colorado suit is scheduled to go to court in March 2001.

The suit must gain certification from a District Court judge to be a class-action suit.

Reilly declined to compare the level of U S West service in New Mexico with Colorado or any of the 12 other states U S West serves.

Reilly also would not say what amount of damages he is seeking in the lawsuit, which was filed on behalf of individual plaintiffs Michael H. Hendrix, Linda M. Diaz and Matthew Mitchell of Socorro County and Jeffrey Diem of Valencia County. The other plaintiff is Custom Services, a Valencia County business.

The suit was filed in Santa Fe because U S West does business in Santa Fe County and because the company "deprived thousands of Santa Fe County residents ... from receiving basic telephone service," the suit stated.

All of the plaintiffs applied for telephone lines and had to wait "an unreasonable and unnecessary amount of time for (U S West) to install" the lines, the suit said.

The suit follows a Tuesday ruling by the state Public Regulation Commission ordering U S West to cut its rates by $29 million a year. That happened despite objections by U S West that the money could better be invested in improved telephone service for residents.

In addition, both the PRC staff and the state attorney general's office want U S West fined for violations, $2.6 million and $3.7 million, respectively.

In a prepared statement, U S West said, "As we said when this lawsuit was filed in Colorado last fall, we believe it is without merit. Here in New Mexico, we are working hard with the Public Regulation Commission - the proper forum for these matters - to resolve issues around service quality.

"The lawsuit is based on old data and is old news. Filing this lawsuit in New Mexico is an attempt to do an end run around the commission, as well as an attempt by competitors to bring new publicity to an old subject."

The 74-page suit makes a variety of claims about U S West, starting with the company's obligation as a public utility to forecast and anticipate demand and have sufficient capacity to fill customer orders.

The suit states that although U S West generated "massive profits" in recent years, "defendant willfully and wantonly decided not to invest these funds into its local telephone network, even though it knew that the network had reached its capacity."

The suit also claims that U S West pursued a "revenues at any cost" agenda that resulted in the deterioration of service and an increase in held orders.

"Rather than increasing the capital budgets to fix the service and held-order problems, defendant imposed on its lower middle management the impossibility of trying to fix the problem without the necessary capital budget."

The suit recalls U S West's effort to re-engineer its company, a move that resulted in the decision to cut between 4,000 and 5,000 jobs. The suit calls that project "an unmitigated disaster" that made the held-order problem even worse.

But rather than report the increase in held orders to regulators, U S West "employed deceptive and misleading numbers to describe the number and duration" of held orders, the suit states.

"To this day, defendant also engages in numerical manipulation by adopting its own limited ... definition of held orders which is inconsistent with fact," the suit says.

The suit also states that U S West gave customers "false, misleading and artificial installation dates" it had no way of filling on time.

In another claim, the suit states that although U S West said it was "surprised" by New Mexico's population growth, the company's Investor Handbook "was at the same time bragging that seven of the 10 fastest-growing states are in our region." One of those was New Mexico.

U S West also gave preferential treatment to its "wealthiest and most influential customers in hopes that this scheme would suppress and minimize complaints from its most educated, wealthy and sophisticated customers," the suit states.

That meant that the company "blatantly and completely abandoned thousands of New Mexico customers who reasonably expected that New Mexico's phone company would provide them service," the suit claims.

Another criticism of U S West in the lawsuit is that the company made several investments overseas - including cable television partnerships in the United Kingdom, Sweden, Norway and Hungary - using money that should have been directed to improving service in New Mexico.



-- Martin Thompson (mthom1927@aol.com), April 27, 2000


I am amazed that, so far, there have been so few telecommunications failures from y2k.

-- Uncle Fred (dogboy45@bigfoot.com), April 27, 2000.

U.S. West has got to be about the worst managed telecom in the country. It is the only one that I have heard of that might have had, or might be having, extensive y2k problems.

-- Billiver (biliver@aol.com), April 27, 2000.

I have a friend who lives in Arizona. She says U.S. West is the most unreliable phone service she has ever used.

-- LillyLP (lillyLP@aol.com), April 28, 2000.

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