Qwest campaigns for asset sales in mergers
By Jeff Smith
Rocky Mountain News

Thursday, October 13, 2005

Qwest executives continued their crusade against the pending SBC-AT&T and Verizon-MCI mergers Wednesday, warning the deals could result in two megasize monopolies controlling communications services in 35 percent to 40 percent of the United States.

Steve Davis, Qwest's senior vice president of public policy, said the companies, if not required to sell some assets, will dwarf the next competitor by 10 times, "resulting in significantly higher prices for consumers and businesses alike."

Gary Lytle, Qwest's senior vice president of governmental relations, said the mergers represent the "most fundamental reshaping" of the telecommunications industry since the breakup of the Bell system 20 years ago.

The comments came at a luncheon with reporters in Washington, where Qwest has been vigorously lobbying against the mergers for months.  The discussion also was conducted by teleconference.

Qwest, which failed in its bid earlier this year to buy MCI, is pushing for SBC-AT&T and Verizon-MCI to be required to divest overlapping assets, and to provide nondiscriminatory network access and prices.

The Denver telco also wants SBC and Verizon to be required to sell stand-alone DSL high-speed Internet service rather than be able to force consumers to buy a package that includes home- phone service.

The merger conditions are important to Qwest's effort to compete for customers in SBC and Verizon territories, where Qwest needs access to the last-mile connections to a company or home.

Qwest has been especially critical of SBC, complaining to the Federal Communications Commission that the Texas-based telco already has restricted services and given better prices to certain competitors.

SBC has called Qwest's arguments and allegations meritless.

"Thirty-three states have approved our merger with AT&T without imposing conditions that Qwest continues to trot out," said SBC spokesman Joe Izbrand.  "People can see through Qwest's scheme of trying to acquire potential divested assets and customers at bargain-basement prices."

Verizon also has consistently said that the Verizon-MCI deal is good for businesses and consumers.

Federal regulators are expected to approve the deals but impose conditions likely to include the divestituture of some overlapping facilities.  Qwest has readily acknowledged it might be interested in acquiring some of those assets.

Qwest has pointed out that it was required to sell its long-distance business in order to merge with U S West in 2000.  (Qwest has since been allowed to re-enter long-distance.)

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