Despite launching a criminal investigation into Qwest Communications International Inc. through it’s U.S. Attorney’s office, the Department of Justice recommended approval Tuesday of the regional Bell operating company’s application to offer long-distance services in five of its 14-state territory.
In June, Qwest filed its Section 271 application with the FCC seeking approval to begin providing long-distance voice and data services in Colorado, Idaho, Iowa, Nebraska and North Dakota, saying it had met the 14-point checklist to show its networks in those states are open to competition. The Telecommunications Act of 1996 requires the Section 271 provisions be met showing the incumbent is providing competitors access to its network and databases for entering new orders.
It was less than two weeks ago that Qwest acknowledged the U. S. attorney’s office in Denver told it that a criminal investigation of the company had been launched. Specifics of the investigation have not been disclosed. In the meantime, the Securities and Exchange Commission also is examining the company’s accounting practices. Qwest has vowed to cooperate fully with both investigations.
Reportedly, the SEC’s investigation focuss on how Qwest booked revenue in 2000 and 2001 for long-term capacity swaps, or IRUs, with other carriers. Following notice of an informal inquiry in March by the commission, Qwest stated that its accounting policies, practices and procedures for all periods, including 2000 and 2001, comply with all applicable requirements.
Despite its trouble, the DOJ reported that all “available evidence suggests that generally, Qwest has succeeded in opening local telecommunications markets to competition,” And although the department has provided its recommendation to the FCC, it expressed a couple concerns. One regards Qwest’s providing computer systems access to competitors, and the other is in how the RBOC charges for certain network elements that must be made available to competitors.
Qwest previously provided long-distance service in the five states. It had to cease service in its territories two years ago when it acquired US West, but it vowed then that it would meet the Section 271 criteria and eventually offer long-distance service in all 14 states it serves. The company believes that can be accomplished by year’s end.
The FCC has until Sept. 11 to rule on this first application. Qwest has four other applications pending.
