B2B firms fight Qwest relief
Telecoms meet with PUC commissioners in an effort to keep Qwest from raising rates for "last-mile" connections.
By Kimberly S. Johnson
Denver Post
Wednesday, April 16, 2008

Qwest's request for a reprieve from federal regulation guiding the amount it can charge competitors for access to its lines was fought at the local level Tuesday at the Colorado Public Utilities Commission.

Business-to-business telecommunications companies met with PUC commissioners asking for support in their fight to deny a Qwest petition that would potentially increase the rates it charges companies such as Covad and XO Communications for "last-mile" connections to businesses and, in some cases, homes.

"Wholesale rates will go up, and it will impact small and medium business customers," said Denver-based Gregory Diamond, senior counsel for Covad.

The San Jose, Calif.-based company has significant operations in Denver, including a customer-operations center in the Lowry area.

Qwest filed a petition with the Federal Communications Commission last April asking for forbearance, or relief, from federal rules setting those rates in its top four markets — Denver, Seattle, Phoenix and Minneapolis — stating that there is sufficient competition in these markets to remove fixed pricing.

"Our argument to the FCC is that promoting competition doesn't mean limiting competition," said William Haas, vice president and deputy general counsel for McLeod USA, now Pactec.

But according to Steve Davis, Qwest's senior vice president of public policy, the petition would "relieve us from providing the facilities and service below cost."

"We would be able to provide just and reasonable rates," he said.

The FCC has until July 26 to rule on the petition.

"If the FCC doesn't act in 15 months (of filing the original petition), then it's granted indefinitely," said Rex Knowles, executive director of regulatory affairs for XO Communications, which has 3,000 customers and 334 employees in the Denver area.

The PUC submitted comments in support of denying Qwest's petition last August, but since that time, two commissioners have been replaced.  The new group has not taken a stand on the issue.

Qwest won FCC relief in the Omaha market in 2005. For McLeod, the move has led to monthly cost increases of 30 percent for specific wholesale services.  Some one-time connection fees have jumped from $70 to $650, Haas said.

"We (recently) told the Nebraska commission that we are going to stop offering residential service and service to small- business customers," Hass said.  "Since 2005, we've taken our direct-sales force out of Omaha."

Kimberly S. Johnson: 303-954-1088 or kjohnson@denverpost.com

http://www.denverpost.com/business/ci_8942690