Qwest Seeking Long-Distance Love From FCC

Communications Today, May 30, 2002

Qwest Communications International [Q] this week said it plans to seek approval next month from the Federal Communications Commission to offer longdistance service in five states. Federal regulators barred the company from offering long-distance service in its 14-state home territory when it acquired local phone service provider US West in 2000.

Bell companies and other incumbent local carriers must pass a 14-point federal checklist proving their local networks are open to competitors before they can offer consumers long-distance service in the company's home states.

Gaining FCC approval to offer long-distance service in any of its home territories would be a boost to the company's sagging revenues. However, we believe Qwest has more pressing issues on the table, such as completing the sale of its phone directory business to avoid defaulting on debt and meeting its upcoming financial guidance. "[Getting 271-application approval] would certainly be a step in the right direction [for Qwest]," Dan McBride, a senior analyst with Detroit-based H&R Block Financial Advisors, told Communications Today. "But in the near term, I don't think [getting the long-distance approval] would affect the company's share value that much."