Denver – Qwest may have been the loser in the high-stakes bidding war for MCI, but the company is quietly waging a much more successful campaign to sell its services without government looking over its shoulder.
So far, Denver-based Qwest has persuaded eight of the 14 states it serves to at least partially lift price controls on things like voice mail, caller ID and call forwarding. It’s something the other Baby Bells are also pursuing amid burgeoning competition from cellphone carriers and Internet-based services.
The push has some consumers concerned that deregulating any price control could end up putting the cost of basic phone service out of reach.
“What do we do when all these prices go up?” asked Fred Wilhoft, a 69- year-old retiree in Golden. He said his neighbors could end up choosing between paying for phone service or prescriptions in any given month.
The deregulation effort is part of Qwest’s overall strategy to position itself for the future after losing out to Verizon Communications Inc. for MCI. Qwest has some hurdles to jump – it is saddled with about $17.3 billion in total debt and lacks a wireless division as cellphone service soars across the country.
One of Qwest’s biggest challenges is to sign up customers for its nationwide fiber-optic network. Chief executive Richard Notebaert told stockholders in the past week he plans to achieve that goal by acquiring smaller companies or perhaps the assets of larger ones – similar to buying the parts and then building a vehicle. He declined to be specific.
Analysts figure Qwest needs to make something happen soon.
“This is their chance to try to do something. They’ll be able to show sort of stabilizing revenues and decreasing costs,” said Donna Jaegers, a telecommunications analyst with Janco Partners Inc.
The deregulation campaign, however, has been underway for months.
Many states are adopting some form of deregulation when it comes to special features like voice mail and certain business services, though basic service is still regulated.
Steve Davis, an executive vice president at Qwest, said utility commissions and lawmakers recognize that regulation can hurt competitors.
“It slows one’s ability to change prices in a market where prices are generally going down,” he said.
Colorado regulators are considering a proposal in which control would be eliminated on long distance and eased on special services.
The Colorado Public Utilities Commission would continue to regulate the first phone line at a residence and the first three phone lines at a business.
The proposal was the result of a settlement reached between the PUC staff and Qwest and was endorsed by the state Office of Consumer Counsel. Commissioners are expected to make a decision in June.
