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Qwest insists network price caps unnecessary
The FCC wants better competition in four markets to lift controls.
By Alex McCarthy
Denver Post
Tuesday, July 29, 2008

Qwest Communications is looking to prove that its level of market competition meets regulators' standards after the Federal Communications Commission denied its forbearance petition Friday, a company official said.

Qwest senior vice president of public policy Steve Davis said the Denver-based telephone and data-services company will double efforts to show that competition does exist in its markets, despite what others contend.

"The competition is there; our customers have many choices of different providers of services," Davis said.  "What we need to do is find better means of proving the exact level and extent of that competition."

The FCC unanimously voted late Friday to maintain wholesale price restrictions on "last-mile" network lines that Qwest leases to competitors in its Denver, Phoenix, Minneapolis-St. Paul and Seattle markets.

Under the 1996 Telecommunications Act, incumbent carriers such as Qwest are required to provide to competing carriers the use of their networks' "last-mile" access into buildings and residential areas.  Those wholesale customers are charged a regulated wholesale rate unless relief, or forbearance, is granted.

Qwest claimed in its petition that competition was sufficient in these markets to eliminate the cost-based price cap, but FCC Chairman Kevin Martin disagreed, saying in a statement that specific market facts did not warrant the price relief Qwest sought.  He added that he would re-evaluate those markets as competition changes.

Qwest was angling for a repeat of the forbearance it won in Omaha in 2005, but competing local carriers, state public-utilities commissions and various consumer-advocacy groups were vocal about the negative effects such a decision would have in their markets.

Jim Greenwood, director of Colorado's Office of Consumer Counsel, said in a statement, "Had the FCC granted Qwest's petition, the Denver market undoubtedly would have seen wholesale price increases from Qwest that would have affected competition and, consequently, retail prices to Colorado consumers in both the residential and business markets."

Alex McCarthy: 303-954-1381 or amccarthy@denverpost.com

http://www.denverpost.com/business/ci_10026552