The Ariz. Corporation Commission (ACC) staff agreed that Qwest’s ...

additional pricing flexibility, basic-service rate increases and a larger draw from the state universal service fund. The ACC staff, however, said Qwest’s deficiency claim is exaggerated because of an excessive depreciation allowance. The staff (Case T-01051B-06-0454) proposed changes that would increase Qwest’s revenue by about $11 million. The staff would keep the caps on basic services unchanged, but allow Qwest cost-based increases on selected optional and discretionary services. The staff disagreed with Qwest’s proposal to declare the state’s major cities to be competitive market zones where the carrier would have broad freedom across the board to change prices in response to the market. The ACC staff urged that Qwest instead should be required to apply for pricing freedom by specific zip codes and demonstrate to the commission that there’s enough competition to warrant pricing freedom. The staff also opposed Qwest’s plan to expand the size of the state universal service fund by $64 million and allow Qwest and other local providers to draw out these additional funds. Qwest’s reply to the staff’s comments is due Dec. 10. Hearings in the case are to start Feb. 10.