OMAHA, Neb.—A federal judge has ruled the fees Qwest Communications International Inc. charges its competitors for using its lines in Nebraska must be based on costs, not market rates.
U.S. District Judge Lyle Strom ruled against Qwest this week. The Denver-based phone company had filed the lawsuit to challenge the Nebraska Public Service Commission’s order that the rates it charges Cox Communications.
Commission spokesman Gene Hand said Friday the ruling will essentially maintain the current system because cost-based rates are already being used when Qwest lines carry Cox calls.
Qwest had wanted to negotiate a higher market-based fee for the use of its lines instead of using the cost-based formula.
State regulators must approve the amount charged under the cost-based formula, which does allow for a reasonable profit in addition to the cost.
Qwest had also argued that state regulators shouldn’t review these fees because the practice of carrying a call part of the way for another company is overseen by the Federal Communications Commission.
Qwest spokeswoman Stephanie Walkenshaw said Friday the company was disappointed with the ruling but hasn’t decided whether to appeal.
Cox’s director of regulatory affairs, Rob Logsdon, said that if the ruling stands it would bring the two companies closer to finishing a new operating agreement because the rate dispute is one of the few remaining disagreements.
While the two companies negotiate, the previous operating agreement that spells out how Qwest and Cox interact remains in effect.
The dispute between Cox and Qwest is related to the 1996 Federal Telecommunications Act. That law sought to break apart the local phone monopoly held by regional carriers such as Qwest and Verizon Communications by making their networks available to rivals at discounted rates in order to foster competition.
The agreement between Qwest and Cox allows the two companies to send calls over the other’s network.
Qwest is the Nebraska’s largest provider of local telephone service, and it provides phone service in 13 other mostly Western states.
Cox is an Atlanta-based cable company that serves the Omaha area where it also provides phone and Internet services.
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