BOISE, October 20, 2003 - Qwest Communications International Inc. (NYSE: Q) today expressed disappointment in the Idaho Public Utilities Commission?s (IPUC) decision to maintain monopoly era regulation of local wireline telephone service in Qwest?s seven major Idaho markets.
Ten months ago, Qwest applied to the IPUC for the same pricing and marketing freedoms as its non-regulated competitors for residential and small business consumers in Boise, Meridian, Caldwell, Nampa, Twin Falls, Pocatello, and Idaho Falls. Qwest?s application to the IPUC presented extensive evidence that cellular telephone service in each of the seven areas provides direct competition to Qwest?s traditional wireline local telephone service.
?It?s puzzling that anyone would deny that cellular service competes with traditional wireline service,? said Jim Schmit, president of Qwest in Idaho. ?We?re frustrated and disappointed because we believe that government regulation should not be based on the type of technology used, but rather on the service provided. From a customer?s perspective, they serve the same function. With over a half-million cell phones in Idaho, and a declining number of wirelines, the numbers speak for themselves.?
Based on Idaho law that dates back ninety years (1913), the IPUC regulates Qwest?s wireline telephone service to residential and small business customers. The cellular providers, however, have no price regulation or oversight by the IPUC.
?The Public Utilities Commission missed an opportunity to benefit Idaho consumers,? said Doug Lincoln, senior marketing professor, Boise State University. ?Allowing both cellular and wireline providers the same opportunity to serve customers would provide much more efficient and effective consumer protection than this decision to continue government regulation.? Lincoln has conducted extensive market research on the effects of cellular service competing with wireline service in Idaho.
Qwest is evaluating the IPUC?s order and considering its options to reduce outdated regulation, thereby improving its ability to serve and respond to customers.
The type of flexibility sought by Qwest in this application would not be new to Idaho. Fifteen years ago (1988), the Idaho Legislature was a national leader in recognizing the changing telecommunications landscape and removed pricing and marketing restrictions for Qwest services to large business customers and virtually all other consumer services such as in-state long distance, caller ID and call waiting. These changes have facilitated increased investment and improved service levels. Qwest?s application would have simply extended that same marketing and pricing flexibility to basic wireline telephone service.
Qwest Communications International Inc. (NYSE: Q) is a leading provider of voice, video and data services to more than 25 million customers. The company?s 47, 000 employees are committed to the ?Spirit of Service? and providing world-class services that exceed customers? expectations for quality, value and reliability. For more information, please visit the Qwest Web site at www.qwest.com.
Forward Looking Statement Note
This release may contain projections and other forward-looking statements that involve risks and uncertainties. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by us with the Securities and Exchange Commission, specifically the most recent reports which identify important risk factors that could cause actual results to differ from those contained in the forward-looking statements, including but not limited to: the duration and extent of the current economic downturn in our 14-state local service area, including its effect on our customers and suppliers; access line losses due to increased competition, including from technology substitution of our access lines with wireless and cable alternatives; the effects of our restatement of historical financial statements including delays in or restrictions on our ability to access the capital markets or other adverse effects to our business and financial position; our substantial indebtedness, and our inability to complete any efforts to de-lever our balance sheet through asset sales or other transactions; any adverse outcome of the SEC's current investigation into our accounting policies, practices and procedures and certain transactions; any adverse outcome of the current investigation by the U.S. Attorney's office in Denver into certain matters relating to us; adverse results of increased review and scrutiny by Congress, regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; further delays in making required public filings with the SEC; rapid and significant changes in technology and markets; any adverse developments in commercial disputes or legal proceedings, including any adverse outcome of current or future legal proceedings related to matters that are the subject of governmental investigations, and, to the extent not covered by insurance, if any, our inability to satisfy any resulting obligations from funds available to us, if any; our future ability to provide interLATA services within our 14-state local service area using our proprietary telecom network assets (as opposed to on a switched access basis); potential fluctuations in quarterly results; volatility of our stock price; intense competition in the markets in which we compete including the likelihood of certain of our competitors emerging from bankruptcy court protection or otherwise reorganizing their capital structure and competing effectively against us; changes in demand for our products and services; acceleration of the deployment of advanced new services, such as broadband data, wireless and video services, which could require substantial expenditure of financial and other resources in excess of contemplated levels; higher than anticipated employee levels, capital expenditures and operating expenses; adverse changes in the regulatory or legislative environment affecting our business; and changes in the outcome of future events from the assumed outcome included in our significant accounting policies.
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