Qwest disputes charges of Telecom Act violations

Qwest Communications has denied allegations made by the Minnesota Public Utility Commission (PUC) that it violated the 1996 Telecommunications Act by entering into agreements with some competitive carriers in the state that were not available to other carriers.

The PUC also alleged that Qwest failed to publicly file the 11 agreements in question and make them subject to commission approval.

Steve Davis, Qwest’s senior vice president of policy and law, denied the allegations and said the 11 agreements at the heart of the commission’s complaint have nothing to do with interconnection and consequently do not need to be filed and approved under the act.

In one of the agreements, Qwest settled a past dispute over a billing disagreement. “They thought we charged them too much for something,” Davis said. “We reached a settlement with them. That’s not a term of interconnection.”

In another agreement with Eschelon Telecom, the two companies agreed to arbitrate disputes at the highest levels of the company before turning to litigation. “Again, that’s not determining interconnection. It’s not the type of thing the act requires to be filed,” Davis said. “Where we offer a loop to two companies, it’s the same loop, the same provisioning and the same price.”

But it is language in the Eschelon agreement that in large measure has caused the commission to take action, said Kevin O’Grady, telecommunications analyst for the Minnesota PUC. He said a section of that agreement specifically references reciprocal compensation for Internet traffic and that the clause has served as a lightening rod for the commission.

“That’s been a big issue on the federal level for quite awhile, and there are a lot of carriers that would like to have the same type of language in their agreements,” said O’Grady.

The Eschelon agreement also contains language that seems to indicate the carrier was given a 10% across-the-board discount for consulting services it provided Qwest, said O’Grady. “That’s the kind of thing that looks bad. It would be one thing if it were accounted for in a way that indicated Eschelon was compensated for a certain amount of hours. But this looks like Eschelon is getting a deal no one else is getting.”

The complaint is currently before an administrative law judge. Hearings begin April 29, with a final decision expected three to four weeks afterwards. Should Qwest be found in violation of the Telecom Act, it would be subject to fines of $10,000 per day, per incident. O’Grady said the commission estimates that penalties could range from $50 million to $200 million.