Critics say Qwest stifles competition
Qwest plans to file a request with the Federal Communications Commission to enter the long-distance market as early as the first quarter of 2002, maintaining it has opened its territories to competition, improved customer service and lowered rates.
Under the Telecommunications Act of 1996, which marked the national deregulation of the industry, Baby Bells were precluded from participating in long-distance markets until they opened local territories to competition.
"It was a way to force them to make the transition from a monopoly model into a free-market model," said local communications consultant Charles McHenry.
Although Qwest (which merged with US West last year) says its territories are open, critics maintain the telecommunications giant hasn't done enough, pointing to the hefty amount of market share Qwest still controls, as well as the company's poor customer service and high overall rates.
McHenry and others vow to take a hard-line consumer advocate stance, refusing to let Qwest slide on critical issues in advance of stepping into the lucrative long-distance market.
"I don't think (Qwest) has opened up enough for competition," McHenry said. "If the residential customer in Southern Oregon wants to shop competitively for local phone service, they can't really do it. If you're a big business, you can."
But Gary Miller, Qwest's area manager, disagrees, maintaining 88 percent of Qwest's telecommunications lines are available for competitor use. Only 16 percent of that capacity is being utilized, he added.
Competitive telecommunication companies have leased Qwest lines and equipment, but they have essentially "cherry picked" lucrative business customers, say both McHenry and Miller.
While Qwest is required to serve residential customers, a market with a narrow profit margin, competitors do not, Miller said.
The question still remains how best to attract competitors into the residential market. Miller maintains Qwest wasn't mandated to lure competitors to jump in, only to provide them access to its lines and infrastructure.
"We have to demonstrate we don't control the market," he said. "We have no control over whether competitors will move in, provide service and take advantage of it."
Bundling telecommunication services, such as local and long-distance telephone service, Internet access and cable television, has been a way providers across the country have attracted customers who want the simplicity of one bill for all of their services, Miller said.
In addition to the issue of competition, Miller said Qwest has lived up to its part of the rural service improvement bargain by committing $70 million required for rural upgrades. Projects include the installation of a number of fiber optic "rings" throughout Oregon.
But McHenry said the utility is backing out of important projects it initially agreed to because of cost overruns.
"They need to live up to their ... obligations completely and thoroughly," he said.
Qwest has taken heat for its historically poor customer service track record. It has been cited with hefty FCC fines and demands that the utility improve. Miller said customer complaints have dropped significantly over figures a year ago.
"I would like to emphasize that Qwest's PUC (Public Utility Commission) complaints have dropped 38 percent," he said. "For the sake of our employees, they deserve a pat on the back."
"I want to credit Qwest for the improvements they've made," McHenry conceded. "But President Reagan promised consumers lower rates and better service (with telecommunications deregulation). Has that happened? I would say, no."
In the end, McHenry anticipates Qwest will succeed in its bid to market long-distance service, but not on its initial filing, and not without providing tangible proof the utility hasn't prevented competitors from entering its territory.
Reach reporter Shari Downhill at 776-4463, or e-mail .