Qwest withdraws nine-state long-distance application

Qwest Communications today notified the FCC it would withdraw its nine-state application to provide interLATA service under Section 271 of the Telecom Act. The nine states included Colorado, Idaho, Iowa, Montana, Nebraska, North Dakota, Utah, Washington and Wyoming.

Qwest said it expects to re-file an application for the nine states by the end of September.

According to Steve Davis, Qwest’s senior vice president of policy and law, the decision to withdraw the application stemmed from questions that arose at the FCC concerning the carrier’s plans to restate its financial statements for previous periods. Qwest decided to re-file the application in order to answer those questions despite maintaining that transactions between its local service and long-distance units were accounted for in accordance with GAAP (generally accepted accounting principles) and the FCC’s affiliate transactions rules.

Davis, in a press release, called the FCC’s review of the application “extraordinarily thorough and fair” and said there are no competition issues. “Qwest has demonstrated that its local markets are as open as any in the nation,” he said.

FCC Chairman Michael Powell said in a statement that Qwest’s application was “razor close” to approval. “In these applications, Qwest did much to otherwise demonstrate it has complied with the market-opening provisions of the Section 271 competitive checklist. … I am confident that Qwest, in consultation with the states, Department of Justice and this commission, will expeditiously resolve the outstanding issues that prevented approval.”

However, Len Cali, AT&T vice president - law and director of federal government affairs called Qwest’s application “a sham” and said it demonstrated “an utter disdain for the law.” He added that the application contained numerous violations of the 14-point checklist used for determining whether an incumbent has opened its local market to competition.

“These applications should not have been filed … [and] much remains to be done to open Qwest’s local markets to competition,” Cali said.

The spokeswoman questioned Qwest’s stated goal of re-filing the application in just 20 days. “[This goal] can only be met by seeking to mask, rather than cure, the significant shortcomings of these applications.”

--Glenn Bischoff, Senior Writer