QWEST STATES KEEP PROBING DEALMAKING CHARGES

Qwest state regulators are moving ahead with their investigations into allegations that company had engaged in discriminatory dealmaking with CLECs, while AT&T attacked Qwest for seeking national ruling from FCC on what sorts of deals with CLECs must be publicly filed with states.

Colo. PUC says it was evaluating responses it sought from all companies that might have knowledge of alleged Qwest-CLEC “sweetheart deals” to see if there was cause for action. Qwest allegedly made private preferential deals to buy off CLEC opponents of its regulatory initiatives. PUC spokesman said agency opened “informal” inquiry 2 months ago in response to complaints about alleged preferential agreements with selected CLECs that weren’t filed with Colo. regulators, meaning other CLECs in Qwest’s hq state couldn’t opt into them. Staff attorneys of Colo. Attorney Gen. Office are participating in review, and AG spokesman said issue was being taken seriously.

Ore. PUC staff is reviewing 68 Qwest-CLEC contracts in informal investigation of allegations raised by AT&T of secret Qwest deals. PUC spokesman said staff anticipated first report to PUC around end of May or early June on whether there were any grounds for state action. Staffers said major concern was whether some Qwest dispute resolutions with CLECs were actually or potentially discriminatory and therefore should have been filed for state review.

N.M. Public Regulation Commission has assigned hearing examiner to review CLEC contracts filed by Qwest. State Attorney Gen. Office has joined case as intervenor. Open question in this docket is whether Qwest has agreements in force beyond those on file and whether such pacts are discriminatory. PRC staffers said proceeding still was in its early stages and declined to speculate on how long investigation might take.

Minn. administrative law judge opened hearings Tues. on alleged sweetheart dealmaking, and regulators in Ariz. and Utah also are in early stages of inquiries. In each state, Qwest says it has done nothing wrong and has right to enter into confidential side deals to settle disputes, including requiring pledges that CLECs won’t attempt to re-litigate issues elsewhere in guise of opposing Qwest long distance entry and other initiatives.

AT&T, which led campaign against Qwest’s allegedly improper dealmaking, assailed latter’s move to ask FCC for national ruling on what negotiated side deals and dispute settlements must be filed publicly (CD April 30). By going to FCC, Qwest hopes to avoid state-by-state litigation and possibility of inconsistent state filing requirements.

Qwest’s FCC petition (Wireline Competition Case 02-89) asserts public contract terms that must be filed for state review include only descriptions of services and functions CLEC receives, options available to CLEC, service quality and performance guarantees, and rates for services including any volume or term commitments that trigger discounts. Qwest said public disclosure and state approvals weren’t required for mechanical details of interconnection and operation support system implementation, administrative details of parties’ business-to-business relationship, dispute settlements or provisions relating to services not subject to Sec. 251. Comments are due at FCC May 29, replies June 13.

AT&T called petition to FCC “highly disingenuous ploy” to turn down heat Qwest had been taking over its dealmaking ever since mid-Feb., when Minn. Dept. of Commerce, acting as consumer advocate, sparked controversy by seeking fine of up to $200 million for Qwest’s allegedly anticompetitive side deals with at least 3 CLECs. AT&T said any time Qwest gave discounts or other preferential treatment to any CLEC, that was an interconnection agreement that should be filed publicly for state approval and available for opt-in. AT&T said it was pretty late for Qwest to “feign ignorance” about FCC interconnection rules.