East Valley Tribune, April 23, 2008
By Ed Taylor

Qwest Communications is seeking to extricate itself from federal regulations designed to increase competition in the telephone industry, saying the rules are no longer needed.

But competing telephone companies oppose the move, saying the industry is not yet competitive enough to justify such deregulation. The move, if approved by the Federal Communications Commission, would cause some telephone providers to reduce service or pull out of the Valley because they would no longer be able to compete with Qwest, they say.

The issue centers on provisions of the Telecommunications Act of 1996, designed to bring competition to an industry then dominated by regulated monopolies such as Qwest. The law required Qwest and other incumbent carriers to lease equipment in their systems - lines and switches - to competitors at wholesale rates so the competitors could provide service at comparable retail prices.

In a petition filed with the FCC, Qwest said it should no longer be required to do that because there is plenty of competition for Valley residential and business phone customers.

"The Telecom Act rules have ... done what they were intended to do," said Qwest spokesman Jeff Mirasola. "There now is competition."

He cited wireless telephone service, which has grown exponentially since 1996, competing service by cable television operators such as Cox Communications, and Voice over Internet Protocol (VoIP), which uses the Internet to route calls.

He also said many of the companies that use the Qwest system have other options for routing their calls, and some have installed their own infrastructure.

He said Qwest might still lease its equipment to competitors, but the company wants to be free to negotiate wholesale rates rather than abide by regulated wholesale rates.

But competing phone companies said Qwest would want higher rates if it is freed of its regulatory obligations, putting them at a pricing disadvantage in trying to lure retail customers.

Some might pull out of the market, reducing choices available to business customers and raising prices, said Mary Albert, assistant general counsel for COMPTEL, the association representing competing companies.

She said there are no other networks to which competitors could turn to route their calls because Qwest built up the primary telephone infrastructure over the many decades when it was the monopoly telephone provider.

Lisa Youngers, director of federal regulatory affairs for XO Communications, offering competing telephone service to about 2,000 business customers in the Valley, said her company would have to consider its options if the FCC approves Qwest's request.

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