PORTLAND, Ore., January 15, 2003 - Qwest Communications International Inc. (NYSE:Q) today filed an application with the Federal Communications Commission (FCC) for authority to provide long-distance service to nearly 1.5 million customer lines in Oregon. The application also includes New Mexico and South Dakota. Today?s filing comes a few weeks after the FCC unanimously approved Qwest?s long-distance re-entry application for nine other states in its local service territory. Qwest plans to file similar applications for long-distance authority in its remaining two states, Arizona and Minnesota, within the next few months.
Qwest filed the application with the FCC after the Oregon Public Utilities Commission (OPUC) completed extensive hearings by finding that Qwest met all applicable requirements of the Telecommunications Act of 1996. The OPUC is scheduled to make formal recommendations to the FCC supporting Qwest?s application in approximately 20 days.
?Soon, customers in Oregon will enjoy the benefits of real long-distance competition,? said Judy Peppler, president for Qwest in Oregon. ?The FCC unanimously approved our application for nine states. Local markets in Oregon are open to competitors and now it?s time to open up the long-distance market to Qwest.?
Qwest has spent more than $3 billion to open its markets to competitors and comply with the act. Today?s filing contains extensive evidence that Qwest has met all the requirements of the act.
The FCC application includes data from an extensive third-party test of Qwest?s systems and performance that demonstrates Qwest?s excellence in providing wholesale services. The test covered 13 of the 14 states in Qwest?s local service territory and was conducted by regulators from throughout those states. During the test, tens of 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. Qwest has also passed a separate and comparable systems test in Arizona.
Consumer Savings, Performance Assurance
Residential and business customers in Qwest?s region could save more than 1 billion annually with Qwest?s re-entry into the regional long-distance business, according to a study by Professor Jerry A. Hausman, director of the Massachusetts Institute of Technology Telecommunications Research Program. Qwest?s long-distance service offering could save customers in Oregon up to 90 million annually, according to the study. On January 7, Qwest announced its new long-distance offerings that continue to deliver the Spirit of Service? through simple pricing, the convenience of one bill and additional savings for customers who purchase a package of Qwest services.
Qwest is supporting its application with comprehensive performance monitoring and enforcement plans to ensure the service standards for its wholesale customers remain strong. The plans provide individual competitors with damages if Qwest does not provide competitive local exchange carriers the same level of service that it provides its own retail operations or if Qwest fails to meet applicable benchmarks standards. Those damages could total as much as 36 percent of the net operating income that Qwest derives from local exchange services in Oregon.
Local and Long-Distance Competition
Local phone service competition in Qwest?s territory is strong, underscoring that Qwest has met FCC requirements for its application.
- Qwest?s estimates, based on an extensive analysis of competitor activity in Oregon, show that competitors have captured between 21 and 22 percent of the local phone market ? a greater percentage than they had in New York or Texas at the time local phone companies there received FCC approval to offer long-distance service;
- The OPUC has approved 168 interconnection agreements between Qwest and competitors;
- Qwest has processed more than 82,000 Oregon competitors' order requests in the past 12 months;
- More than 83 percent of Qwest?s Oregon customers have easy access to a competing facilities-based service provider;
- In October 2002 alone, more than 822 million minutes of traffic was passed between Qwest's customers and competitors? customers over competitors' facilities in Oregon.
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 53,000-plus 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.
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; the effects of our anticipated 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; 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; the failure of our chief executive and chief financial officers to provide certain certifications relating to certain public filings; 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; 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; 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; 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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