Qwest Wins Backing for Long-Distance Bid

Qwest Communications International Inc. on
Wednesday won the backing of U.S. antitrust enforcers for the telephone
company’s bid to offer long-distance voice and data services in four states.

Qwest, which is under federal investigation for its
accounting practices, is seeking approval to offer the
services in Montana, Utah, Washington and
Wyoming but must first prove its local networks there
are open to competition.

In its recommendation to the Federal
Communications Commission ),
the U.S. Justice Department
urged approval but expressed concerns about
Qwest’s prices for certain network parts that must be
made available to rivals as well as computer systems
relied upon by competitors to access the network.

"In particular, competitors have made progress in penetrating the business
markets in those states," Charles James, head of the department’s antitrust
division, said in a statement.
"Questions remain, however, about aspects of Qwest’s OSS (operations
support systems) and pricing that merit further examination by the FCC ," he said.

The FCC will render the final decision on the application by Oct. 10, taking into
account the recommendation of the Justice Department as well as state
regulators. A Qwest spokesman was not immediately available for comment.

The company acquired local telephone carrier U S West in June 2000 and had
to cease offering long-distance service in 14 states, largely in the western
United States, until it met the threshold for local competition.

The 1996 Telecommunications Act bars dominant local telephone carriers from
providing long-distance voice and data services until, among other things, they
give competitors access to the network of wires that connect homes and
businesses as well as databases for entering new orders.

The Justice Department already backed Qwest’s application to offer
long-distance services in five other states — Colorado, Idaho, Iowa, Nebraska
and North Dakota — though raised similar concerns about prices and the
company’s computer systems. The FCC must rule on that bid by Sept. 11.

Qwest recently overhauled its management team and posted a $1.1 billion
second quarter loss, cut 2002 financial forecasts and said it would restate
results for 1999 to 2001 after misreporting $1.16 billion in sales.

Shares of the Denver-headquartered company closed down 1 cent to $2.94 on
the New York Stock Exchange