Qwest might have to pay $30 million in refunds to Colorado phone consumers

Qwest (NYSE: Q) may be anxious to complete its merger with new parent CenturyLink (NYSE: CTL) early next month, but right now it's facing the possibility of having put $30 million aside in an escrow fund to refund Colorado customers over a 2009 telephone service rate increase that was overturned.

However, the Colorado Office of Consumer Counsel said that Qwest might end up paying $100 million in refunds after it goes through the appeals process and the case is remanded to regulators for official calculations. When the process is completed in about three years, Qwest would be doling out $100 refunds to consumers in 2013.

According to a report in The Denver Post, Denver District Judge Herbert Stern overturned a 2009 decision made by the Colorado Public Utilities Commission that authorized Qwest to increase monthly charges for basic residential phone service. In October 2009, Qwest upped phone rates from $14.88 to $16.52 and then in October 2010 it raised the rates again to $17 per month.

Stern wrote in Thursday's order that "Qwest shall obtain a bond in the amount of $30 million or place said amount in an interest-bearing escrow account."

Qwest refuted the amount, arguing that the refund would likely be less than $10 million. In response, Stern said that Qwest did not give regulators or the court any "data or information" on how it came up with its figure, adding that $30 million estimate is "fair and accurately reflects the data already in the record."

For more:
- The Denver Post has this article
- here's FierceTelecom's Q4 earnings summary

Related articles:
Qwest: Landline losses eat into Q4 earnings, but CenturyLink merger is on track
CenturyLink, Qwest: A new service provider era?
Qwest launches new dedicated E-Line service

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