Qwest: Let FCC rule on prices
The company asks Congress to stay out of the debate as it seeks an exception to limits on its wholesale service rates.
By Kimberly S. Johnson
Denver Post
Thursday, June 26, 2008

With just a month before a key regulatory ruling, Qwest is continuing to fight for a petition that would let it raise rates for wholesale customers and is asking congressional members to refrain from getting involved.

In a letter to U.S. Rep. Diana DeGette, a Denver Democrat, earlier this month, Qwest chief executive Ed Mueller requested that Congress not block the Federal Communications Commission from deciding on the petition by July 26.

The Denver-based telecommunications company filed a petition with the FCC in April seeking forbearance, or relief, from federal rules limiting wholesale service rates in its top four markets — Denver, Seattle, Phoenix and Minneapolis.  In its request, the company said there's sufficient competition in these markets to eliminate the need for fixed pricing.

"We believe the time to stop price regulation is now," said Mueller in the letter to DeGette.  "All we are asking of Congress, and our in-region congressional delegation in particular, is that the expert agency, the FCC, be allowed to complete its consideration of Qwest's forbearance petitions."

The companies that buy wholesale service from Qwest have been talking to the FCC and members of Congress in hopes the FCC will reject Qwest's petition.

"Congress has oversight of the FCC, I think it's perfectly appropriate for them to weigh in," said Lisa Youngers, director of federal regulatory affairs for XO Communication.  "What is at stake here is very important."

According to Steve Davis, Qwest's senior vice president of public policy, it's unlikely Congress would step in to stop or delay the FCC's decision.

"It was more to advise the congresswoman what the status is and what's going on," he said.  "We believe (the concept of) low-cost prices to jump-start statewide competition has run its course.  Competition is vibrant in the marketplace."

Youngers disagreed, noting that in many places Qwest is still the only company that provides last-mile connections to businesses and residents.  She said that should Qwest be granted forbearance, there will be "tough choices to make."

"The result will be rate increases," she said.  "And as a company that provides services, facilities and employees in those markets . . . that has a real impact . . . and a lot of consequences."

Qwest won a forbearance petition in Omaha in 2005.  In recent months, McLeod USA, now Paytec, said it would stop signing up new residential and small-business customers because of price increases it has endured from Qwest, according to William Haas, vice president and deputy general counsel for McLeod USA, in an April Denver Post interview.

However, in a separate letter to the FCC last week, Qwest called McLeod's reasoning "untrue," stating the company's actions in the market have to do with the company shifting its focus to midsize businesses.

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

http://www.denverpost.com/business/ci_9694604