Apr 22, 2002 12:00 PM,

CARRIER LAMBASTS QWEST OVER MINNESOTA RATE HIKE

Glenn Bischoff

CLEC says agreement was violated; Qwest says it followed orders

Qwest Communications is under attack in Minnesota. Again. One month after the state''s public utility commission launched an investigation into Qwest over whether it was cutting certain deals with select CLECs, Eschelon Communications has filed a formal complaint alleging Qwest raised the prices it charges Eschelon for unbundled dedicated interoffice transport (UDIT) services.

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Qwest and Eschelon negotiated the interconnection agreement governing UDITs, the circuits that connect a carrier''s co-location facility with its switch, in 1999. In January 2001, the Minnesota PUC issued a cost docket that called for a dramatic increase in the UDIT rates (see figure).

QWEST-IONABLE RATES
The rates Qwest is charging Eschelon for DS-1 and DS-3 lines have jumped dramatically. Qwest says it''s following a commission cost order; Eschelon says Qwest is violating an interconnection agreement.
	Before March 2001	After March 2001
DS-1	$40-$60 per month	$180 per month
DS-3	$320-$380 per month	$2800 per month
Source: Eschelon, Qwest

That was the start of the trouble. Qwest maintains it did nothing wrong when it raised Eschelon''s rates.

“It is our practice to abide by commission orders,” said John Stanoch, Qwest''s vice president of policy and law for Minnesota.

But William Markert, Eschelon''s vice president of network financial management, said the only way Qwest can apply the terms of the cost docket is to negotiate another contract. Eschelon has been paying Qwest based on the rates contained in the amendment and contesting the difference, which comes to about $140,000.

“The price was reasonable to us, and then all of a sudden they changed,” Markert said. “We can''t plan our network by having our costs go up by six times from what we were paying.”

However, Kevin O''Grady, telecom analyst for the Minnesota PUC, said the interconnection agreement is open to interpretation. “Technology has changed and practices have changed, so there''s room for very honest and reasonable people to disagree,” he said. “Qwest isn''t necessarily doing anything wrong here.”

Markert disagreed. “With 390-page documents, there''s always room for interpretation, but not in this particular case.”

O''Grady predicted the volume of complaints will rise as the number of competitors in Minnesota climbs. “We''re going to see a lot more inter-company bickering than we have in the past.”