Qwest takes steps towards long-distance filings

(Telephony) In a keynote address delivered this morning at the National Association of Regulatory Utility Commissioners winter conference, Qwest chairman and CEO Joseph P. Nacchio indicated his company is moving quickly towards re-entering the long distance market.

Qwest was forced to spin off its long-distance service in its 14-state territory as a condition of the company’s merger with U S West.

Among the recent steps Qwest has taken to open its markets to competition--a condition that must be met if the company wants to gain FCC approval of any long-distance applications it submits--are two wholesale agreements it has completed with McLeodUSA and Eschelon Telecom.

In addition, Qwest also signed what it is describing as the industry’s first permanent line agreements that will allow competitors to provide high-speed data connections over the company’s phone lines, even to customers who buy their local phone service from Qwest.

“There is a new attitude at Qwest,” said Steve Davis, vice president of policy and law. “We believe that competition is good and that opening markets is good. If we can sell something wholesale at a price that makes sense for us, then that’s a business we should be in.”

It’s an attitude that will help the company navigate 14 separate long distance applications, according to Steve Koppman, senior analyst at Gartner Dataquest.

“Qwest has definitely demonstrated an enthusiasm and cooperation in terms of changing the U S West attitude towards competition,” he explained. “One hopes that it gets translated into action, because when it does, they should get approval fairly expeditiously.”

Another factor that may expedite Qwest’s applications, when they are eventually filed later this year, is its strategy to multi-test its operating support systems with 13 of the 14 public utility commissions it must eventually sway.

The tests, which begin next month, are designed to demonstrate that CLECs will have the same access to information and databases currently enjoyed by Qwest’s retail branches. The tests also will assure that the service received by the CLECs is equal to the company’s internal processes.

By satisfying the requirements of 13 PUCs at the same time, Qwest hopes to shorten the approval curve.

“When we’re done, we’ll have 13 states poised to proceed with filings,” said Davis. “It’s like a relay race where you start all your runners at the same time. After one lap, we’ll be done, while everyone else will be working on their next state.”

Deborah McMahon, vice president, Mercer Management Consulting, said she thinks the strategy has a lot of merit.

“It sounds very intelligent,” she said. “They’re trying to get approval on a state level that’s homogeneous, and that’s going to put them on the fast track.”

Maybe not, counters Koppman, who says Qwest shouldn’t expect to get all of the approvals it wants before 2003.

“We have been speculating that the FCC will be more permissive regarding RBOC applications in the current administration," he said. “But this is a long, complex process. The multi-testing will help, but given the complexities they’re facing, they will be pretty successful if they can get approval for 14 states in two years.”