AT&T miffed as Quest tries to go the distance

Qwest Communications has filed an application with the US FCC for authority to provide long-distance service to customers in Washington. AT&T representatives are less than happy.

Qwest Communications has filed an application with the US Federal Communications Commission (FCC) for authority to provide long-distance service to 2.6 million customer lines in Washington. In addition to Washington, Qwest filed for authority to provide long-distance service in Utah, Montana and Wyoming. With the filing, applications are pending at the FCC for a total of nine Qwest states. Qwest plans to file similar applications for long-distance authority in its remaining five states in the summer and autumn.

Qwest filed with the FCC after the Washington Utilities and Transportation Commission (WUTC) completed extensive hearings by finding that Qwest met all applicable requirements of the Telecommunications Act of 1996. The commission is scheduled to make a formal recommendation to the FCC supporting Qwest’s application in approximately 20 days.

‘The benefits of real long-distance competition will soon be coming to customers in Washington,’ said Kirk Nelson, Qwest vice president of policy & law for Washington. ‘Washington and eight other states have found that our local markets are open to competitors and that we’ve complied with the Telecommunications Act. Now it’s time to open up the long-distance market to Qwest.’

On June 13, 2002, Qwest filed an application for authority to provide long-distance service to customers in Colorado, Idaho, Iowa, Nebraska and North Dakota. Last week, regulators in those states filed formal recommendations with the FCC in support of Qwest’s application. A decision on the application is expected in mid-September, 2002.

Qwest currently provides long-distance services outside of its 14 Western states. However, when Qwest acquired U S West on June 30, 2000, Qwest had to divest itself of its long-distance business in those states. Under the act, Qwest can re-enter the long-distance business in a state once its application to the FCC has been approved.

Not everyone is happy, though. Tom Pelto, AT&T Vice President, AT&T Law and Government Affairs is one of them.

‘The timing of Qwest’s FCC filings is odd to say the least. Indeed, AT&T has filed a motion seeking reconsideration with the Washington commission and is considering filing similar motions with the other states, in light of the pending criminal investigation of Qwest. With mounting evidence of secret deals, questionable accounting, and a new federal criminal probe underway, granting regulatory relief to Qwest at this moment is unthinkable. At a time when Qwest’s corporate misdeeds are becoming ever more apparent, there is no reason for state commissions to be in a rush to reward them, which is what they have effectively done,’ he said.

‘The individual commissions have given Qwest the benefit of the doubt and accepted its assertions at face value even as the character and credibility of the company are increasingly suspect. There is absolutely no reason to believe that Qwest was more scrupulous in (these) proceedings than it was in audited accounting statements – if they were cooking the books, there’s little doubt that they were also baking this data. At a minimum, these states should suspend their positive recommendations until they go back to independently verify every piece of data provided by Qwest,’ he added.

‘Consumers should be outraged that while a criminal investigation of Qwest’s business practices is underway, state commissions have refused to launch their own investigations into Qwest’s secret deals and have instead turned a deaf ear and a blind eye on its anti-competitive practices.’

‘We hope that the Department of Justice and the FCC will conduct a thorough, impartial and principled review of competitive concerns, with an eye toward what consumers really need – but don’t have – local choice. We also hope they do not give Qwest a free pass on the secret deals as these states have done, but instead follow the lead of Minnesota and Arizona in aggressively investigating Qwest’s efforts to coerce silence,’ he concluded.