COMMENTS OF PUBLIC COUNSEL
I.  INTRODUCTION
 Public Counsel is pleased to have the opportunity to comment on the 
disposition of the refunds resulting from the Supreme Court ruling on Docket 
No. UT-950200.  While we await a clarification from the Court on the proper 
jurisdiction for implementing the refunds, Public Counsel believes its position 
to be fundamentally consistent and equitable to USWC, its competitors and its 
customers no matter what authority is ultimately assigned the responsibility 
for ensuring that customers receive the money to which they are entitled.
 Primarily, we would consider the interests of the two million customers harmed 
by overpayment to the Company in contrast to the essentially administrative, 
financial and competitive interests asserted by the Company when implementing a 
refund.  Public Counsel believes that a full balancing of these interests would 
result in a timely payment of all moneys, plus interest, to those customers who 
incurred additional costs as a result of the Company-requested stay of rates.  
In these comments we discuss the preferred interest rate, calculation of refund 
liability, and methodology for effecting a full and timely refund. 

II.  INTEREST RATE
 Public Counsel maintains the position it took in its earlier comments  Office 
of the Attorney General, Public Counsel Section, January 16, 1998 Comments, p. 
4.  that the appropriate rate of interest is the judgment rate.  Because many 
of the other intervenors have made excellent arguments to support this 
position, we adopt those arguments and see no reason to repeat them.  See 
especially January 16, 1998 Comments of the Washington Utilities and 
Transportation Commission staff and January 14, 1998 Comments of the U.S. 
Department of Defense and All other Federal Executive Agencies.  While Public 
Counsel has joined in a motion to the Supreme Court asking for clarification on 
the jurisdiction of the refund question, we believe that the judgment interest 
rate should apply regardless of which body has enforcement of the process to 
distribute the refund.

III.  CALCULATION OF LIABILITY
 Public Counsel has been provided with workpapers showing monthly units for 
various services subject to refund.  Given the magnitude of the money at stake, 
Public Counsel is extremely concerned that the liability calculations be 
independently verified.  Although we have been unable to perform such an 
analysis at this time, we are in contact with Commission Staff and support 
their efforts to ensure that liability is quickly and accurately assessed.
 A.  Depreciation Reserve
 Public Counsel respectfully urges the Commission to reject the Company’s 
proposal to divert a large percentage of the refund owed to customers to its 
depreciation reserve.  We share the Company’s wishes “not…to debate this issue 
within this proceeding,”  US West Communications, Inc. January 16, 1998 
Comments, p. 6 at 5. and urge the Commission to avoid so doing by refusing to 
consider the diversion of the refund amount for several reasons.
 First, the recently completed make-whole case did not reflect any large 
credits to the depreciation reserve to reduce rate base, nor has US West 
proposed any incremental rate reduction to pro-form such an effect into 
UT-970766 rates.  Another concern is the deferred tax issue that arose in 
connection with depreciation sharing dollars in UT-950200,  See 15th Supp. 
Order at p.59 Tax Issue V.A. when moneys owed to ratepayers were diverted to 
the depreciation reserve.  The Commission has recent relevant experience with 
this concept and should recognize that crediting the depreciation reserve in 
lieu of refunds would re-open this issue and dilute benefits to ratepayers.  
Finally, the Company’s proposal to re-litigate the amount of the reserve and 
establish yet another potential refund liability is of no interest in the 
context of its perceived machinations in implementing the return of the money 
outstanding from this refund liability.  US West Communications, Inc. January 
16, 1998 Comments, p.6 at 20.
 B.  Depreciation Stipulation
 Public Counsel respectfully requests the Commission to reject the Company’s 
proposal to reduce its liability by the amount of the depreciation stipulation 
retroactively to January 1, 1997.  The stipulation to UT-951425 specifically 
addressed and quantified rate implementation for the depreciation increase in 
either the informal audit [the now complete UT-970766] or by rate increase 
effective 12/31/97 in the absence of a timely resolution of UT-970766.  In the 
resolution of that case, the parties did not agree to any reduction of 
UT-950200 refunds in connection with implementation of new depreciation accrual 
rates.
 Additionally, the record in UT-970766 does not support a conclusion by the 
Commission that increasing rates retroactively on this single issue would be 
proper.  There was no quantification of any 1997 test period revenue 
requirement, with or without depreciation rate changes, in UT-970766, which was 
based upon a 1996 test period.  However, there is evidence in the record in 
that case to suggest that expenses decreased and rate base declined during 1997 
relative to 1996.  Therefore, allowing the Company to recover depreciation 
increases in 1997 on a single-issue basis would likely allow US West to 
over-earn.  Given these facts and the recent resolution of UT-970766, the 
Company should have ample opportunity to recover the costs associated with 
depreciation on a going-forward basis without retroactively applying those 
expenses to offset the refund liability.

IV.  REFUND METHODOLOGY
 A.  Refund Recipients
 Public Counsel believes that those customers who paid rates that have been 
found unjust and unreasonable are entitled to full and prompt recovery, plus 
interest, of the amounts that they were overcharged during the period the rates 
were in effect.  This principle leads us to support repayment to each customer 
for the specific amount they overpaid, not repayment based on an average amount 
of usage or some other proxy.  Public Counsel adopts the excellent legal and 
policy arguments in support of customer-specific refunds advocated by Staff, 
MCI and TRACER, and the US Department of Defense in their January 16, 1998 
comments, and will therefore not repeat them.
 The Company’s assertion that it will enjoy little success in identifying those 
customers who are eligible for refunds should be viewed in the context of the 
Company’s other claim “that most current customers were also customers since 
May 1, 1996.”  US West Communications, Inc. January 16, 1998 Comments, p.5 at 
15.  If the overlap among the current population of customers and the 
historical population for the period in question is so great, the difficulty of 
identifying recipients will be applicable to only a marginal number of 
customers.  
 The Company should make all reasonable efforts to return the money to the 
customers who paid it, including but not be limited to a search employing the 
use of forwarding addresses, mailing addresses for final bills, the Company’s 
own 14-state and national directory assistance data base, and the use of 
advertisements to publish notices in large-circulation newspapers.  Any money 
that cannot be returned to specific customers could be allocated in a number of 
ways: equally across all access lines, equally to all users of the particular 
service, or to a public education trust for telecommunications consumers in 
Washington administered by the state.
 US West has as yet offered no detail regarding what can be done and at what 
cost.  If the Company maintains its assertion that customer specific data is 
for some reason unavailable [or unavailable in a meaningful format and time 
frame], the Commission should initiate a fact-finding process to allow the 
parties to examine each feasible alternative to effect refunds with 
descriptions of relative accuracy and the cost of each proposed method.  Then 
the Commission could weigh trade-offs between accuracy and cost in deciding 
methodologies .  
 B.  Refund Mechanism
 Public Counsel believes there are two clear forms that the refund could take: 
a check or a bill credit.  Public Counsel believes the best form of a refund 
would be check issued by the Company to the consumer.  Over the course of the 
stay, consumers have overpaid the Company with money [not a credit against 
charges for future service] and should be entitled to compensation in the same 
form.  Public Counsel suggests that all customers owed more than $25 receive a 
single check for the full balance of their refund, and that those customers 
owed less receive a credit against their entire US West bill.
 The Company argues that issuing checks would be administratively more costly 
and difficult.  While not denying that there may be some costs involved, we ask 
the Commission to balance the interests of the Company against those of 
ratepayers for whom the costs of paying unreasonable rates have also been 
“unduly expensive.”  US West Communications, Inc. January 16, 1998 Comments, 
p.5 at 7.
 The Company further argues that such a refund would be detrimental to cash 
flow.  However, the Company specifically sought, and was granted, waiver of a 
requirement to post bond to cover the liability.  It should be remembered that 
the Company has been collecting this money as a direct result of its insistence 
upon overcharging customers in spite of the Commission’s order.  US West has 
enjoyed the benefits of overcollecting and could have simply placed the money 
in an escrow or reserve account to minimize any risk it might incur as a result 
of the liability.  The Company has created this situation and should assume any 
and all burdens involving the risk of any cash flow problems that result.
 In contrast, the great majority of US West residential and small business 
customers are not of equivalent size and do not enjoy the relatively stable 
cash flow that US West does.  They have been forced do endure their own ‘cash 
flow’ problems as a result of the Company’s actions.  Note that a consumer 
choosing to make a payment to US West and thus forgoing a payment to a credit 
card debt incurs charges that typically run from 13 % to 18 %, compounded using 
an average daily balance.  Public Counsel is not advocating the use of the 
consumer discount rate to calculate interest on the refund liability, but 
merely suggests that all consumers, and not just US West, face difficult 
decisions about how best to allocate scarce resources.  For all these reasons, 
we believe that a concern for providing financial restitution to consumers 
should outweigh the expense incurred by the Company in making good its 
commitments in a timely fashion.
 Should a bill credit rather than a check be used as the mechanism to deliver 
the refund, Public Counsel agrees with the Company: “Should the Commission 
desire a single refund credit as the methodology for effecting refunds; US West 
requests that such a credit be applied to the customer’s bill on a one time 
basis.”  US West Communications, Inc. January 16, 1998 Comments, p. 7 at 17. 
 Public Counsel does have some concern that a bill credit would serve as a 
windfall reduction of the Company’s bad debt exposure.  Despite Public Counsel 
attempts to recognize adjustments to the Company’s level of bad debt in the 
most recent rate case proceeding, the Commission chose not to do so, thus 
accepting the Company’s recent, much higher level of uncollectible exposure as 
an ongoing increase in the cost of doing business.  In combination with the 
newly enacted late payment charge, Public Counsel is concerned that a 
widespread bill credit program would allow the Company to recoup losses already 
recognized as test period expenses.  A double recovery is likely if US West is 
allowed to systematically offset delinquent or uncollectible account balances 
with potential refund moneys.
 C.  Timing of the Refund
 Public Counsel strongly advocates for a one-time reimbursement to customers, 
rather than a gradual refund.  There are several reasons that support immediate 
relief.  First, the administrative burden of providing the refund in one 
installment is likely to be substantially less than continued tracking over any 
extended period of time.  Second, prompt relief will prevent the already large 
liability from continuing to grow.  At the judgment rate of interest, 
outstanding balances will accrue quickly thus increasing the Company’s total 
liability significantly.  The Company notes this prospect itself and is 
appropriately concerned.  US West Communications, Inc. January 16, 1998 
Comments, p. 5 at 10, see footnote #5.  Third, an extended repayment schedule 
will only serve to exacerbate any difficulties in identifying and tracking 
customers due a refund.  Fourth, such a process will provide market-distorting 
incentives to consumers.  By tying customers to US West over the duration of 
their refund repayment, delay in processing the payment would not be 
competitively neutral.  Because we advocate for full return of any liability to 
each customer in one payment, Public Counsel suggests that a bill credit is 
only appropriate, if at all, for those customers whose monthly bill is greater 
than the money owed to them by the Company.
 Public Counsel suggests that a date certain be established for the full and 
complete return of all refund liabilities to the customers who incurred them.  
The Company has proposed to issue an immediate credit in certain cases within 
the business exchange service,  US West Communications, Inc. January 16, 1998 
Comments, p. 11 at 6. and Public Counsel believes that the courtesy of such 
timely action should be extended to all of US West’s customers, but in the form 
of a check rather than a credit.  The Company should be responsible for 
tracking and reporting the amounts actually refunded by the established date to 
the Commission, with interest continuing to accrue until the ultimate 
disposition of all the dollars is complete.
 D.  Access Charges
 Public Counsel is concerned, as are many of the other intervenors, that the 
refund provided to the inter-exchange carriers be passed through to the 
ultimate end-users of switched access minutes.  We would support a proposal 
that can provide reasonable guarantees of such a pass through on both a 
retrospective and prospective basis.  Public Counsel believes that market 
pressure may achieve this result.  As noted above, Public Counsel favors a 
one-time check made payable to the users of this service based on their minutes 
of actual usage.
 E.  Toll Reductions
 Public Counsel does not support use of the money collected under US West’s 
stayed tariffs to be applied to a going forward toll rate reduction beyond the 
levels called for in the Commission’s Fifteenth Supplemental Order.  The 
Company’s willingness to ensure that customers receive the full benefit of 
access charge reductions in the form of immediate refunds should be no 
different for its own excess toll revenues collected.  Notably, USWC would not 
refund access overpayments to the IXC’s and propose that IXC toll rates be 
prospectively and ratably reduced.  Furthermore, nothing prevents the Company 
from exercising pricing flexibility to reduce toll rates and other competitive 
rates without spending ratepayer moneys to do so.
 Since the Company asserts knowledge of those customers who have not made toll 
calls and those customers who have made a certain dollar volume of toll calls 
over the past year in Exhibit 6, based on the billed telephone number, it 
should be capable of establishing the correct customer-specific refunds on a 
historical basis.  Again, Public Counsel favors a one-time check made payable 
to the users of this service based on their minutes of actual usage.
 F.  Business Exchange Reductions
 Public Counsel is concerned with the Company’s proposed offering of bill 
credits for specific products and services to offset potential refunds to 
business customers.  There are considerable potential anti-competitive risks 
inherent in such a proposal, which intervenors MetroNet, MCI, and TRACER have 
thoroughly addressed in their comments.  Providing the Company with the 
opportunity to market services to customers by essentially buying down the cost 
with the customers’ own money would provide US West with a significant 
advantage, particularly should any incremental refund process that tied a 
customer to the Company be adopted by the Commission.
 Should the refund come in the form of a bill credit rather than a check, 
Public Counsel supports the notion that customers will know best how to 
allocate their telecommunication dollar.  To that end, customers should be free 
to choose how best to allocate their own resources, rather than marrying the 
customer to US West or having the Company select those services that it is most 
inclined to provide.  Such a choice could clearly result in the purchase of 
more or different products and services from US West, or it could result in 
simply using the credit to cover the cost of the products and services the 
customer already receives.  The customer, not the Company, should determine 
whether to allocate the refund to new services.