Qwest's FCC Pricing Request Stirs Debate On Competition
By Fawn Johnson Dow Jones Newswires June 30, 2008: 04:12 PM EST http://money.cnn.com/news/newsfeeds/articles/djf500/200806301612DOWJONESDJONLINE000477_FORTUNE5.htm WASHINGTON -(Dow Jones)- Telecom companies squabbling over Qwest International Inc.'s bid to raise wholesale prices in four cities are nervously eyeing the end of July, when the Federal Communication Commission must make a decision. The FCC has received dozens of letters, visits, and documents from lobbyists arguing for and against the proposal. The deadline for a decision is July 26. Companies with a stake in the request also are contacting Congress, a sign that the debate over pricing petitions may extend beyond Qwest's market spreadsheet. Qwest filed four petitions last April asking the FCC for relief from requirements that it offer cost-based prices to smaller competitors in Denver, Phoenix, Minneapolis and Seattle. The FCC granted a similar request from Qwest for Omaha, Neb., in 2005. Shortly after the Omaha decision, the FCC denied a request from Verizon Communications for pricing relief in six East Coast markets. Qwest is touting its past success in Omaha as a reason for the FCC to grant its next petition. "There are many similarities between Omaha and these other locations," said Steve Davis, Qwest's senior vice president for Public Policy. Qwest is arguing, as it did in the Omaha case, that it faces significant competition from wireless services and cable providers in the four cities. Qwest also is distinguishing itself from phone giants Verizon and AT&T Inc., making the case, for example, that it doesn't have a wireless component. "We're not Verizon and AT&T. We're certainly a lot smaller in terms of scope and in size," Davis said. Smaller competitors contend that Qwest's previous success in Omaha shouldn't determine the outcome in this case. "You can't assume that because they got it in one market, they're entitled to it in another," said Mary Albert, assistant general counsel for Comptel, a lobby group representing small phone companies. Comptel and individual competitor companies have been aggressively lobbying the FCC about pricing petitions for over a year. Some credit those efforts as influencing FCC's rejection of the Verizon bid. Competitors also are taking their crusade to Congress. After a series of CEOs visited members earlier this month, Comptel followed up last Wednesday with a letter to lawmakers in states where Qwest is seeking relief. The Comptel letter cited officials in each of those states who oppose Qwest's request. "Congress has the authority and public duty to ensure that federal agencies give sufficient weight to the expertise of state and local agencies," the Comptel letter said. Qwest also has corresponded with lawmakers representing the four cities in question. "In four of the most competitive markets that Qwest serves, we believe the time to stop price regulation is now," said a July 12 Qwest letter. Qwest sent a separate letter July 5 to House Energy and Commerce Chairman John Dingell, D-Mich., who is mulling changes to the laws governing such petitions. "Our goal would be to let the members know that the FCC is doing what Congress charged the FCC with doing. There's no basis for change," Qwest's Davis said when asked about both letters. Comptel's Albert said her organization contacted lawmakers because "they're the ones whose constituents are going to be affected." Competitors argue that prices will go up for phone subscribers if Qwest is permitted to raise wholesale rates. When the FCC receives pricing petitions like Qwest's, the commissioners must determine whether each individual market is competitive enough to release the incumbent phone carrier from rules about how much it can charge for the use of its network. FCC's analysis is focused on market details, but its previous actions also can guide commissioners in making a determination. The one thing the FCC can't do is change the petitioning process, which is Congress's purview. Dingell wants to do away with the deadline for the FCC's response. Under current law, petitions for pricing flexibility are deemed granted if the FCC doesn't act by a certain time. Competitor companies complain that larger carriers can dominate the FCC agenda by repeatedly submitting bids for price flexibility. Qwest, meanwhile, is struggling to keep the focus on the four markets in its request. "In Omaha, as in Phoenix or Denver, we're seeing that we've lost substantial market share," Davis said. Comptel's Albert considers the issue more broadly. "We certainly think that there are problems with the statute as it's currently written," she said. When FCC grants pricing flexibility to an incumbent company, she said, "It's basically repealing the statute without any congressional oversight." Incumbent carriers take issue with that. "The statute wasn't developed to protect competitors at all costs," said Independent Telephone and Telecommunications Alliance Curt Stamp, whose group represents mid-size phone companies like Qwest. "It's not Congress's goal to make sure that everybody who wants to stay in business should stay in business." - By Fawn Johnson, Dow Jones Newswires ================================ George Antunes, Political Science Dept University of Houston; Houston, TX 77204 Voice: 713-743-3923 Fax: 713-743-3927 antunes at uh dot edu ******************************* * POST TO [EMAIL PROTECTED] * ******************************* Medianews mailing list [EMAIL PROTECTED] http://lists.etskywarn.net/mailman/listinfo/medianews
