Qwest Promotes Competition As Solution To Bring Lower Prices, New Technology To Federal Telecommunications Market

DENVER, April 26, 2001 ? Qwest Communications International Inc. (NYSE:Q), the broadband internet company, today recommended to federal lawmakers ways to lower prices and bring new technology and services to government telecommunications users.

The FTS2001 program, under which government agencies purchase telecommunications services, was the subject of a hearing before the House Subcommittee on Technology and Procurement Policy, chaired by Rep. Tom Davis (R-VA).

James F.X. Payne, senior vice president of Qwest Government Systems Division, and an industry veteran of over 20 years, shed light on the flaws in a process designed to ensure the best service and price for the government and maximize competition. The General Services Administration (GSA) oversees the FTS program.

?The guiding principles of the FTS program and their vision of robust competition in the federal marketplace are sound,? Payne told Congress in describing the new environment envisioned under FTS2001. ?GSA deserves considerable credit for its contribution to the development of this new paradigm. The problem is not in GSA?s plan; the problem lies in its execution.?

The new FTS2001 program, developed in 1997, calls for three groups of providers -long distance, local and niche - together to increase competition for services and to lower prices while introducing new technology into the federal market.

However, instead of acting as a catalyst to a new telecommunications environment, the reality is a program that has been met with obstacles: the transition from the old FTS2000 to the new FTS2001 contract has been stalled, resulting in higher prices to government agencies and a waste of taxpayers dollars. In addition, administration of the program has created artificial barriers to competition.

?These barrier have impeded agency access to new technology, better service and lower prices,? Payne said.

To overcome these obstacles, Payne recommended four steps to GSA, administrator of the FTS contracts:

  • Allow Qwest and other interested providers to propose niche contracts to help conclude the never-ending transition from the FTS2000 to the FTS2001 contractors. The original contracts have been ?bridged? numerous times because of the inability of the current contract holders to transition government agencies to the new providers? networks.
  • Fairly administer the FTS2001 contracts, particularly with regard to negotiating appropriate reductions to the Minimum Revenue Guarantees, originally included in the FTS2001 contracts to serve as incentives to bidders, but that in reality have contributed to stifling competition.
  • Lift the forbearance period and allow holders of local telecommunications services contracts to also provide long-distance service, increasing competition dramatically.
  • Aggressively add to the stable of niche contracts to provide agencies alternatives for meeting their needs.

?This program (FTS 2001) has an elegant design,? Payne said. ?That design was meant to mirror the Telecommunications Act of 1996 in the commercial marketplace and infuse competition throughout the government marketplace. The marketplace can work wonders if given a chance. That was the primary assessment under both the telecommunications Act of 1996 and the FTS Program Guiding Principles. Let?s get back to that plan and give competition a chance.?

About Qwest

Qwest Communications International Inc. (NYSE: Q) is a leader in reliable, scalable and secure broadband Internet-based 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 106,000 miles globally. For more information, please visit the Qwest web site at www.qwest.com.

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