Telecom battle looms downvalley
Two telecommunications companies, giant CenturyTel, a publicly-traded company based in Vancouver, Wash., and tiny Aurora-based San Isabel Telecommunications, will be slugging it out for residential and business telephone customers, bringing to three the number of companies serving the Eagle River Valley. Qwest serves the eastern part of the company.
Publicly regulated, it’s a curious, if not orchestrated battle that varies between bare-knuckled and kid-gloved, the competitors both cooperate and compete under the watchful eye of the Colorado Public Utilities Commission. The rules of the competition at times are as numerous as yellow pages in a typical phone book, with the objective for each appearing to be straightforward. Each is aiming, too, to gain market share. How they go about it will be evident as the battle heats up.
“Competitors are free to move their business price up and down,” says the Public Utilities’ Commission Terry Bote.
The Utilities Commission sets the base residential rate at $14.92, plus taxes and surcharges, per month. Business rates are not regulated, however, and therefore are often more highly coveted.
CenturyTel is the eighth-largest phone company in the United States, providing local, long-distance, Internet and data services to three million people in 21 states. It is traded publicly (NYSE-CTL) and has annual gross sales of approximately $1.8 billion. Locally it has about 16,000 access lines from Edwards to Gypsum and north into southern Routt and Grand Counties.
The first competitive skirmish of this battle with San Isabel happened south of Gypsum at the Chatfield Corners subdivision, where San Isabel emerged with a contract for residential customers, a deal hammered out with the developer.
The battle also has been carried to Eagle Ranch, south of Eagle.
But the battle lines were drawn decades ago when US West’s – now Qwest’s – territorial line was drawn just west of Avon, leaving open undeveloped areas to the west. A portion of that area was served by Eagle Valley Telecomm, which sold to Pacific Telecomm. Then seven years ago, CenturyTel bought the territory.
Interestingly enough, the Eagle Valley at one time was owned by the same organization that now operates San Isabel.
“We’ve always believed western Eagle County was a good place for a phone company,” says San Isabel vice president Brent Wagner.
Different rules, roles
Doug Alden, CenturyTel’s western regional vice president, says his company will continue to pursue its business strategy. One thing CenturyTel is attempting to change, he says, is the strictures it currently faces as the only carrier in the territory it serves.
With that comes a order by the Utilities Commission that CenturyTel provide service to any area that requests it – but a competitor, such as San Isabel, is not bound to do so, allowing the competitor to “cherry pick” profitable business and residential accounts.
“We’re working with legislators to level the playing field,” says Alden.
San Isabel is now burying a 13.5 mile-long fiber-optic cable from Eagle Ranch to Gypsum valley to serve its customers there. The company also is providing wireless and cable-based phone service for residential and business customers in some 10 counties on the Western Slope.
Now, however, the competition is aimed at keeping or gaining market share here in Eagle County.
At the developing Eagle Ranch south of Eagle. Both CenturyTel and San Isabel have the right to provide service to business and residential customers. Unlike many developments, however, the hard-wired telecommunications infrastructure is owned by East West Technology, a group allied with the area’s developer, East West Partners.
Wagner said he’s expecting his company will provide service for up to 4,000 customers in the Edwards, Eagle, Gypsum and Dotsero areas.
In the regulated telecommunications arena, the two competitors will even cooperate, as required by the Utilities Commission, in providing service to business customers in places where one company already has installed infrastructure. That will likely happen in Edwards, where CenturyTel already has the connecting infrastructure in place for its 9,000 customers.
San Isabel is designated by the Utilities Commission as a competitive local exchange carrier. It can compete at any level in any area it chooses, says the Utility Commission’s Bote.
San Isabel’s Wagner, meanwhile, says that in most telephone markets business customers subsidize residential customers. He will be soliciting business customers in Edwards, he says, where CenturyTel customers have experienced successive phone outages in recent months – some lasting as long as three days – when software problems affected a central switch. The intermittent problems defied a quick solution for the company and frustrated residents and business owners enough the mounted a letter-writing campaign to company officials and to local elected officials.
Since February, however, the company has not experienced service problems.
CenturyTel also is in the midst of a $10 million software and hardware upgrade in Edwards to pave the way for growth and to correct some service problems it has experienced. Alden, who has established temporary residence in Edwards to oversee the upgrade, says he expects the upgrades to be completed on schedule in July. A new switch for the Edwards office arrives this week.
San Isabel does offer one area of service CenturyTel does not – wireless. The Aurora-based company has approximately 200 wireless customers so far, Wagner says.
CenturyTel, meanwhile, recently sold its wireless division, while Qwest continues to serve Eagle County from Arrowhead east.