PHOENIX, April 22, 2002 ? Qwest Communications International Inc. (NYSE:Q) today applauded a comprehensive report issued by Cap Gemini Ernst & Young finding that it has successfully completed an Arizona systems and performance test demonstrating Qwest?s efficiency in providing wholesale services and support to competitive local telephone companies. The report sets the stage for Qwest to file an application with the Federal Communications Commission (FCC) to re-enter the long-distance business in Arizona in late May. Qwest expects to receive approval within 90 days of filing the application with the FCC.
?This report shows definitively that the local market in Arizona is fully open to competition and our systems perform well,? said Teresa Wahlert, Qwest regional vice president and vice president of policy and law for Arizona. ?Arizona customers are now very close to saving $189 million annually in both local and long distance telephone services.?
Cap Gemini?s report finds Qwest successfully gives its competitors access to systems required for FCC approval under federal law. During the test, thousands of transactions were monitored to confirm Qwest?s ability to facilitate orders, installation, repair, billing and other services ordered by competitive local telephone companies. The report follows one issued by Cap Gemini in December 2001 that found Qwest in compliance with Operational Support Systems (OSS) requirements and identified a few narrow areas for retesting. The retesting has taken place over the last few months.
In addition to the OSS report, Cap Gemini issued an endorsement of Qwest?s Change Management Process. The Arizona report finds that Qwest gives its wholesale customers significant input into its internal operations and successfully implements changes to its systems and processes in a way that is seamless to its wholesale customers.
On April 23, 2002, the staff of the Arizona Corporation Commission will issue a comprehensive report addressing the entire 271 process and Qwest?s compliance with federal requirements to re-enter the long-distance business. Qwest has spent in excess of $3 billion to open its markets to competitors and comply with the Telecommunications Act of 1996, including more than $180 million on OSS testing for the multi-state collaborative and in Arizona.
Additionally, an independent report was issued on Friday for the other 13 states in Qwest?s local service territory that demonstrates Qwest?s excellence in providing wholesale services and support to competitive local telephone companies. The draft final report signals the end of the systems and performance test, subject to the completion of a limited retest of one minor test segment. The release of the final report in late May will allow Qwest to begin filing applications with the FCC for approval to sell long-distance services in 13 states.
Qwest?s wholesale service quality is comparable or better on key performance measures than that of Verizon and SBC Communications, whose long-distance applications for New York, Texas and nine other states have been approved by the FCC. Nearly 94 percent of the key wholesale performance indicators that Qwest measures monthly to support its re-entry into the long-distance business meet or exceed either the benchmark standard or are at parity with retail measurements.
Qwest?s long-distance re-entry will save residential and business customers in Arizona up to $189 million annually in local and long-distance charges, according to a study by Professor Jerry A. Hausman, director of the Massachusetts Institute of Technology (MIT) Telecommunications Economics Research Program. After Qwest is approved to re-enter the long-distance business, the company will be able to provide customers with another choice for long-distance service, as well as offer bundled services and the convenience of a single bill.
A study by San Francisco economist Dr. David Sosa, issued by the Goldwater Institute last November, found that an increase in long-distance competition and lowering of prices is expected to save Arizona seniors as much as $150 annually on their phone bills. Primary and secondary school districts also will benefit significantly from Qwest?s entry into long-distance, saving millions in communications and Internet expenses. Moreover, the lower prices will have significant impact on small rural and urban school districts that currently must spend a greater portion of their budget to pay for communications services; these savings can be redirected to improve student performance and classroom experience.
When Qwest acquired U S WEST, the company had to divest itself of its long-distance operations in the 14 western states where U S WEST provided local service. Under the Telecommunications Act of 1996, Qwest can re-enter the long-distance business once its application to the FCC has been approved.
Qwest Communications International Inc. (NYSE: Q) is a leader in reliable, scalable and secure broadband data, voice and image communications for businesses and consumers. The Qwest Macro Capacity® Fiber Network, designed with the newest optical networking equipment for speed and efficiency, spans more than 190,000 miles globally. For more information, please visit the Qwest Web site at www.qwest.com.
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 Qwest 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 potential fluctuations in quarterly results, volatility of Qwest's stock price, intense competition in the communications services market, changes in demand for Qwest's products and services, dependence on new product development and 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, rapid and significant changes in technology and markets, adverse changes in the regulatory or legislative environment affecting Qwest's business and delays in Qwest's ability to provide interLATA services within its 14-state local service territory, failure to maintain rights of way, and failure to achieve the projected synergies and financial results expected to result from the acquisition of U S WEST timely or at all and difficulties in combining the operations of Qwest and U S WEST. This release may include analysts' estimates and other information prepared by third parties for which Qwest assumes no responsibility. Qwest undertakes no obligation to review or confirm analysts' expectations or estimates or to release publicly any revisions to any forward-looking statements to reflect events or circumstances after the date hereof or to reflect the occurrence of unanticipated events.
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