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Qwest wants price controls eased
Competitor says deregulation not freeing up market
By Jeff Smith
Rocky Mountain News
Tuesday, May 1, 2007


Qwest Communications is asking federal regulators to ease wholesale pricing controls in four metropolitan markets -- Denver, Minneapolis, Phoenix and Seattle.  The Denver telco argues such regulations are no longer needed because of affordable local telephone competition from the likes of cable companies, wireless carriers and Internet telephony providers.

Qwest filed the petitions for "forbearance" at the Federal Communications Commission on Friday.  Qwest was granted partial relief in Omaha in 2005, and other regional Bells also have been asking for forbearance in many markets.

At least one competitor, McLeodUSA, plans to oppose Qwest's filings, saying consumer choice could be affected if the rules are lifted.  Business customers especially could be affected, McLeodUSA said.

At issue are rules requiring Qwest and other regional Bells to lease parts of their network to competitors at discounted rates.

The requirements, stemming from the Telecommunications Act of 1996, were designed to promote local telephone competition.

Many companies, to offer competitive local phone services, need to rent pieces of Qwest's network, especially the "last-mile" loops leading to homes and businesses.

Qwest Colorado President Chuck Ward said Monday the rules are no longer necessary because of the increasing number of competitors who have made the investments in their own infrastructure.

In the Denver area, Comcast is a formidable competitor.  Qwest also noted in its FCC filing that consumers "have shown an increasing propensity to 'cut the cord' -- replacing their wireline service with wireless service."

Said Ward:  "The goal of the (1996) Act has been achieved in bringing competition to the marketplace . . . it's an incredibly competitive market."

But Bill Haas, vice president and deputy general counsel for McLeodUSA, said consumers could have fewer options if the FCC grants Qwest's petition.

Haas noted McLeod hasn't been able to come to a new wholesale agreement with Qwest in the deregulated sections of Omaha and now is considering exiting the market.

In general, Haas said, -- McLeod is seeing wholesale rate increases of about 80 percent in areas being deregulated.

Business customers especially could be affected, he indicated.  That's because cable companies are primarily competing with Qwest for residential customers, offering a Triple Play of video, Internet and phone service.

Terry Bote, spokesman for the Colorado Public Utilities Commission, said the PUC is aware of Qwest's forbearance filing and has asked Qwest to provide additional documentation to support its arguments.

Qwest redacted from the FCC filings figures quantifying losses because of competition.

The FCC has a year to act on Qwest's forbearance petition, though it could extend its review by three additional months.

smithje@RockyMountainNews.com or 303-954-5155

http://www.rockymountainnews.com/drmn/tech/article/0,2777,DRMN_23910_5513927,00.html