AG Urges Rejection of Qwest Bid to Enter Long-Distance Market

Olympia - September 7, 2001- Attorney General Christine Gregoire today urged the Washington Utilities and Transportation Commission (WUTC) to oppose Qwest's bid to offer long-distance telephone service in Washington.

In papers filed by the Public Counsel Section of the Attorney General's office, state attorneys allege that Qwest has not opened itself to meaningful competition that would provide consumers with a greater selection of local phone service providers - and possibly lower rates.

Under federal law, before a regional Bell telephone company may move into the long-distance market it must first prove that it has opened local service to competition. The WUTC is currently reviewing whether Qwest has met this requirement and has complied with the 14 elements of a competitive checklist and other requirements.

According to the Attorney General's office, Qwest currently controls 99 percent of the residential telephone service market in its Washington operating areas. Furthermore, most of the 1 percent of the market not directly controlled by Qwest is in the form of resale and will not effectively keep local rates as low as possible, state attorneys allege.

"We are particularly concerned by what is, at best, token competition that currently exists in Qwest's residential markets," Gregoire said.

The WUTC has already identified a number of areas in which Qwest is not complying with federal law.

So far, none of the public utility commissions in Qwest's fourteen-state territory have approved Qwest's entry into the long distance market.

Finally, measures to prevent "backsliding" - allowing Qwest to simply re-monopolize the local market once it gains approval to sell long-distance - need to be finalized.

"The Telecom Act sets up a 'carrot and stick' approach," Gregoire said. "Qwest should only get the opportunity to enter into the long-distance market if it irrevocably opens its local markets to competition."

If long-distance entry is prematurely granted, there is no incentive for Qwest to further open its local markets or to keep them opened, Gregoire said.

The WUTC is expected this fall to issue an order on whether the Qwest proposal is in the public interest. Further proceedings will be held before the Commission makes its final recommendation to the FCC.

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