SEATTLE, July 12, 2002 ? Qwest Communications International Inc. (NYSE:Q) today filed an application with the Federal Communications Commission (FCC) for authority to provide long-distance service to 2.6 million customer lines in Washington. In addition to Washington, Qwest filed for authority to provide long-distance service in Utah, Montana and Wyoming. With today?s filing, applications are pending at the FCC for a total of nine Qwest states. Qwest plans to file similar applications for long-distance authority in its remaining five states in the summer and fall.
Qwest filed with the FCC after the Washington Utilities and Transportation Commission (WUTC) completed extensive hearings by finding that Qwest met all applicable requirements of the Telecommunications Act of 1996. The commission is scheduled to make a formal recommendation to the FCC supporting Qwest?s application in approximately 20 days.
?The benefits of real long-distance competition will soon be coming to customers in Washington,? said Kirk Nelson, Qwest vice president of policy & law for Washington. ?Washington and eight other states have found that our local markets are open to competitors and that we?ve complied with the Telecommunications Act. Now it?s time to open up the long-distance market to Qwest.?
On June 13, 2002, Qwest filed an application for authority to provide long-distance service to customers in Colorado, Idaho, Iowa, Nebraska and North Dakota. Last week, regulators in those states filed formal recommendations with the FCC in support of Qwest?s application. A decision on the application is expected in mid-September, 2002. Qwest has spent more than $#36;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.
Qwest currently provides long-distance services outside of its 14 Western states. However, when Qwest acquired U S WEST on June 30, 2000, Qwest had to divest itself of its long-distance business in those states. Under the act, Qwest can re-enter the long-distance business in a state once its application to the FCC has been approved.
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 $#36;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 will save customers in Washington more than $#36;148 million annually, or an average of $#36;73 per residential customer, according to the study.
Regulators in Washington also approved a comprehensive performance monitoring and enforcement plan to ensure the service standards for its wholesale customers remain strong. The plan provides 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 benchmark standards. Those damages could total as much 36 percent of the net local service revenue that Qwest derives from local exchange services in Washington.
Local and Long-Distance Competition
Local phone service competition in Washington is strong, underscoring that Qwest has met FCC requirements for its application.
- Qwest?s estimates, based on an extensive analysis of competitor activity in Washington, show that competitors have captured nearly 21 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 WUTC has approved 172 interconnection agreements between Qwest and competitors;
- Qwest has processed more than 142,000 Washington competitors? order requests in the past 12 months;
- More than 90 percent of Qwest?s customers have easy access to a competing facilities-based service provider;
- In April 2002 alone, more than 1.7 billion minutes of traffic was passed between Qwest?s customers and competitors? customers over competitors? facilities in Washington.
Customers have responded positively to increased competition in the long-distance market in the states where the FCC has approved long-distance applications. In the first 12 months after Verizon received long-distance approval in New York, approximately 20 percent of customers switched to a Verizon long-distance plan. In Texas, more than 20 percent of local customers switched to an SBC long-distance calling plan in the first nine months the company was authorized to provide service.
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 assumptions, risks and uncertainties. Readers are cautioned not to place undue reliance on these statements, which speak only as of the date of this release. These statements may differ materially from actual future events or results. Readers are referred to the documents filed by Qwest Communications International Inc. (together with its affiliates, ?Qwest?, ?we? or ?us?) with the Securities and Exchange Commission (the ?SEC?), 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; any adverse outcome of the SEC?s current inquiries into Qwest?s accounting policies, practices and procedures; adverse results of increased review and scrutiny by regulatory authorities, media and others (including any internal analyses) of financial reporting issues and practices or otherwise; rapid and significant changes in technology and markets; failure to achieve the projected synergies and financial results expected to result from the acquisition of U S WEST, and difficulties in combining the operations of the combined company; our future ability to provide interLATA services within our 14-state local service area; potential fluctuations in quarterly results; volatility of Qwest?s stock price; intense competition in the markets in which we compete; changes in demand for our products and services; adverse economic conditions in the markets served by us or by companies in which we have substantial investments; 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; adverse developments in commercial disputes or legal proceedings; and changes in the outcome of future events from the assumed outcome included by Qwest in its significant accounting policies. The information contained in this release is a statement of Qwest?s present intention, belief or expectation and is based upon, among other things, the existing regulatory environment, industry conditions, market conditions and prices, the economy in general and Qwest?s assumptions. Qwest may change its intention, belief or expectation, at any time and without notice, based upon any changes in such factors, in Qwest?s assumptions or otherwise. The cautionary statements contained or referred to in this release should be considered in connection with any subsequent written or oral forward looking statements that Qwest or persons acting on its behalf may issue. 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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