Qwest to sell N.M. land lines
By
Tom McGhee, Denver Post Staff Writer
Saturday, April 9, 2005

Qwest plans to sell about 2,400 phone lines in New Mexico to Sacred Wind, a rural telephone company formed to serve the Navajo Nation, where most residents are without phones.

The land lines would be incorporated into a wireless system that Sacred Wind wants to build on the 25,000-square-mile reservation, said John Badal, a consultant with Sacred Wind.  Terms of the deal are expected to be worked out by the end of the month, he said.

The companies haven't announced a sale price for the lines.  The number to be sold is too small to improve the financial condition of debt-strapped Qwest, which owes $17.2 billion, said Janco Partners analyst Donna Jaegers.

But Qwest will rid itself of lines on Navajo land where the population is small, spread out and costly to serve.

Qwest spokesman Vince Hancock said he couldn't comment on the proposed sale.

The line sale would be the first by Qwest since 2001, when the company sold 35,000 access lines in Utah to a consortium of small Utah phone companies for $90 million.

Regulators who are members of the Qwest Regional Oversight Committee asked company representatives at a recent meeting if Qwest was planning to sell more lines in its 14-state region, said Tony Clark, a North Dakota regulator who is chairman of the committee.

"They didn't indicate any interest in selling lines anywhere else in the region," he said.

Funding for the Navajo reservation deal would come from money the state requires Qwest to set aside to help provide phone service to rural residents.

Legislation that was designed to help fund the sale has raised the hackles of some New Mexico lawmakers.

Since 1987, long before Qwest purchased US West in 2000, New Mexico has required the company to set aside $2 million a year to help provide phone service to rural residents.

Those who live further than 1,000 feet from Qwest equipment and who want a land line can draw up to $15,000 from the fund to defray the cost of installation.

There is presently $15 million of that money available.  The New Mexico legislature recently passed a bill that would allow Sacred Wind to use between $4.5 million and $5 million of that to pay for the lines.  The bill, if signed by the governor, also would cut the amount Qwest must earmark for the fund from $2 million to $1 million annually.

Badal said the greatest number of people waiting for phone service in the state are on the reservation, where 60 percent of the 210,000 residents have no phone.

But Republican state senate leader Stuart Ingle said he fears the legislation will cut down the amount of money available to help provide phone service for those who live elsewhere in the state.

Staff writer Tom McGhee can be reached at 303-820-1671 or tmcghee@denverpost.com