Qwest Also Nearing Completion Of Systems Test Covering 13 Other Local Service States; Company Expects To Offer Long-Distance Service In 14 Western States By Mid-2002
DENVER, January 2, 2002 ? Qwest Communications International Inc. (NYSE:Q), the broadband communications company, is on track to file in March 2002 with the Federal Communications Commission (FCC) to sell long-distance service in Arizona, with the successful completion of a critical and comprehensive systems test. Qwest completed the test in December 2001. Cap Gemini Ernst & Young, the independent administrator of the test, declared that Qwest gives its competitors the access to the computers, switches and lines for local phone service required for FCC approval under federal law.
In its 700-page report, issued on December 21, 2001, Cap Gemini found that ?Qwest provides non-discriminatory access to its operational support systems (OSS) to competitive local exchange carriers (CLECs)? and ?the experience of a CLEC using the various OSS interfaces is substantially the same to that of Qwest performing similar activities.? OSS are the computers, processes and systems that facilitate ordering, installation, repair, billing and other services a communications company provides to customers. The Arizona test process has been ongoing for more than two years and is as comprehensive as any OSS test in the country. During the test, Cap Gemini monitored thousands of CLEC transactions processed by Qwest to evaluate the functions and performance of Qwest?s OSS.
Cap Gemini?s June 29, 2001 ?Master Plan for Testing Qwest?s Operations Support System in Arizona,? characterizes the importance of the OSS test by noting, ?Qwest?s successful execution of this comprehensive independent Third Party Test Plan will demonstrate to the Arizona Corporation Commission, the Department of Justice and the Federal Communications Commission the operational readiness, performance, and capacity of the access to OSS that Qwest provides to CLECs.?
Qwest expects to file its application in March 2002 for FCC approval to offer long-distance services in Arizona. Qwest expects to receive FCC approval 90 days after submitting the application.
Meanwhile, Qwest is also making significant progress in collaborative testing of its OSS in the other 13 states in its local service area. KPMG Consulting, the third-party administrator for the 13-state process, recently completed another major test in its review, successfully proving Qwest?s ability to handle projected future volumes of customer orders from CLECs. Remaining tests in the 13 states are scheduled to be completed in February 2002. Qwest will file applications with the FCC for approval to sell long-distance service in the 13 states shortly afterward.
?The successful completion of the Arizona systems test is a major step forward in our effort to offer customers a competitive choice in long-distance service,? said Steve Davis, Qwest senior vice president of policy and law. ?This is a clear indication that the massive investment Qwest has made to implement state-of-the-art systems to open its network to competitors is a success. It also means that Arizona customers are closer to saving $189 million on their phone bills, an average of nearly $80 a year per customer.?
While the OSS tests have been ongoing, Qwest, its competitors and regulators have also been participating in separate state and regional workshops to determine Qwest?s compliance with the remainder of the 14-point checklist mandated by the Telecommunications Act of 1996 for federal approval to sell long-distance service. To date, 12 states have completed workshops on all 14 checklist items. Of those 12 states, five have issued orders completing review of all checklist requirements: Colorado, Idaho, Iowa, Nebraska and Wyoming, subject to completion of the multi-state OSS test. The remaining seven states have issued final orders on most checklist items and are expected to compete their reviews in January and February. Qwest?s actual performance in serving CLECs is equal to, or better than, Verizon?s performance as well as SBC?s performance in New York, Texas, Missouri and Arkansas ? states where the FCC has approved long-distance applications.
?After nearly two years of the most extensive and thorough testing of Qwest?s internal systems, we?re now weeks rather than months away from completion in most of the14 states,? said Davis. ?This brings us to the final step in this extraordinary process: filing applications with the FCC to sell long-distance service in multiple states in our local service territory.?
Consumer Savings, Support
A study by Professor Jerry A. Hausman, director of the Massachusetts Institute of Technology (MIT) Telecommunications Economics Research Program, concluded that residential and business customers in-region could save well over $1 billion annually with Qwest?s long-distance re-entry. Additionally, a report by Consumer Action, an independent consumer non-profit organization, found that long-distance rates are increasing everywhere except in states where the local exchange carrier has been approved to offer competitive long-distance services. The study found that rates actually decreased in these states.
In November, the Communications Workers of America and Qwest?s retiree association ? representing a combined 58,000 current and former employees ? announced support for Qwest?s efforts to re-enter the long-distance business. When Qwest acquired U S WEST, the company had to divest itself of its long-distance holdings 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 Communications International Inc. (together with its affiliates, ?Qwest?, ?we? or ?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: 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; the duration and extent of the current economic downturn, including its effect on our customers and suppliers; 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; rapid and significant changes in technology and markets; adverse changes in the regulatory or legislative environment affecting our business, delays in our ability to provide interLATA services within our 14-state local service area; 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, and difficulties in combining the operations of the combined company. This release may include analysts? estimates and other information prepared by third parties for which we assume no responsibility. We undertake 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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