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Carrier Channel: Arizona Commissioners Probe Qwest Wholesale Billing

Posted: 1/2003

Arizona Commissioners Probe Qwest
Wholesale Billing

By Josh Long

THE ARIZONA CORPORATION COMMISSION
(ACC) plans to conduct a hearing concerning why Qwest Communications
International Inc. failed to implement new wholesale billing rates after local
regulators slashed the average price of an unbundled loop nearly in half.

In June 2002 the ACC cut the
statewide average of an unbundled loop to $12.12, from $21.98. As of early
December, Qwest had yet to implement those new billing rates.

Qwest spokesman Mark Genrich says
the billing cycle would not harm competitors. He says Qwest was scheduled to
change the billing effective Dec. 15, 2002, and credit CLECs in addition to
paying them 6 percent interest.

However, ACC spokeswoman Heather
Murphy says Qwest did not notify commissioners it "was going to take them
this extraordinary" amount of time to implement the new wholesale billing
rates.

Commissioners voted to conduct a
hearing to discuss the matter, but one had not been set as of early December.
Qwest faces additional criticism in Arizona over interconnection agreements it
entered with CLECs without disclosing the arrangements to local regulators.
Minnesota regulators have made similar findings.

Genrich says the company did not
think it had to disclose all of the interconnection agreements to the utility
commissions, but it is doing so now.

The Minnesota Public Utility
Commission found Qwest entered into 12 agreements without disclosing them to
local regulators and, in some instances, the company offered discounts to CLECs
that were unavailable to other competitors, a Minnesota PUC analyst says.

In fall 2002, the commissioners had
considered various possible penalties, ranging from a large fine to revoking the
company’s retail license to operate. Commissioners appear to have steered away
from the most severe penalties, including license revocation, the analyst says.
During a hearing in November, commissioners ordered Qwest to file a plan that
would further telephone competition in Minnesota and address penalties.

On Jan. 29, Arizona administrative
law judge Jane Rodda is scheduled to hear the case and issue a recommendation to
commissioners. Murphy declines to discuss possible penalties commissioners could
impose. Although commissioners are following the case closely in Minnesota, that
does not necessarily mean the ACC will follow the same path, she says.

"Any fines we talk about [are]
premature. We need the judge to reach a finding and make a recommendation to the
commissioners on what, if any, sanctions are appropriate," Murphy says.
"We are following what is happening in Minnesota but the rules do vary from
state to state and what’s meaningful in Minnesota and what kind of sanctions
Minnesota can render may be very different from what we can do here."

In other Qwest news pertaining to
its wholesale business, the company has terminated three contracts for dark
fiber and private-line services within its 14-state region. During an
investigation of its financial records, assets and business practices, Qwest
discovered that it in two separate instances it had leased long-distance dark
fiber in possible violation of its US West merger agreement.

Qwest voluntary disclosed the
information to the Federal Communications Commission and has returned the money
to those companies plus interest, says spokesman Bill Myers, who adds the
agreements did not represent a lot of money.

In a private-line agreement with
Cable & Wireless, Qwest also found four out of 120 lines covered regions
within the company’s local territory, Myers says. Qwest informed C&W of its
plans to terminate the agreement no later than Dec. 9, 2002. Qwest never
received payment for those private-line services, Myers says.


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