AG's Office Recommends Denial of US West-Qwest Merger

Olympia - February 1, 2000 - The Attorney General's Office today recommended that the proposed merger between US West and Qwest Communications be denied unless strong service quality conditions are imposed.

According to written testimony filed with the Washington Utilities and Transportation Commission (WUTC), the Attorney General's Public Counsel Office has concluded that US West is "substantially out of compliance" with most Washington service-quality rules. In addition, "customer complaints are high and service-quality trends are not favorable," the testimony stated.

"The merger application contains nothing to suggest the new company would improve service," Attorney General Christine Gregoire said. "Our recommendations are designed to commit the company to improving basic customer service first, and compensating Washington customers when service is inadequate."

The Attorney General's Office recommended that before the merger is approved, US West be required to:

• Provide credits on a customer's bill in an expanded variety of circumstances when the company fails to provide the minimum service required by law.
• Complete current orders for service that are now delayed.
• Provide customers with an order confirmation number when they request service, so they will have a way to track their order within the company.
• Develop a mechanism to penalize the company when statutory service-quality requirements are not met.
• Expand monthly service-quality performance reporting.
• Assure that costs of the proposed improvements be paid by the company and shareholders, not ratepayers.

The Public Counsel Office concluded that the proposed merger would put customers at greater risk as the merging companies integrate operations and capital is drawn away from the traditional phone business through investment in out-of-region and non-regulated activites.

US West and Qwest sought merger approval from the WUTC in August. The commission is expected to rule in March, following public hearings. The merger also requires approval from the Federal Communications Commission and regulators in other states served by US West.

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