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,
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
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