Colorado’s consumer advocacy office has asked regulators to raise service-quality benchmarks and potential fines for Qwest as a condition of approving the telecommunications company’s proposed merger with CenturyLink.
Qwest’s service levels have deteriorated since 2009, with the company taking longer to answer customer phone calls and complete repairs, according to the Colorado Office of Consumer Counsel.
The consumer office said service could worsen because Qwest and CenturyLink are expected to shave $575 million in annual operating costs after the merger.
“The OCC is concerned that some of these anticipated operating expense savings could result from reduced expenditures for customer call center operations,” OCC financial analyst Frank Shafer said in written testimony submitted to the Colorado Public Utilities Commission.
The PUC will accept public comment about the merger at a hearing at 4 p.m. today at 1560 Broadway, Suite 250, in Denver. PUC Chairman Ron Binz is expected to issue a decision by December.
Authorities in Colorado and eight other states are still reviewing the deal, which was announced in April and has won approval from 12 states and Washington, D.C.
Qwest’s Colorado president, Chuck Ward, said the Denver-based company strives “every day to provide the best possible service.”
“The CenturyLink/Qwest merger will result in a company that is stronger financially and competitively, to the benefit of our customers in Colorado,” Ward said in a prepared statement.
State regulations require Qwest to answer 85 percent of calls for repairs within 60 seconds or pay a monthly fine. The company is currently above that benchmark, though the percentage is dropping. The consumer office wants to raise the benchmark to Qwest’s current percentage — which it can’t disclose for competitive reasons — to ensure that service doesn’t further deteriorate. It also wants the benchmark applied to residential and business sales center calls.
“This is a big merger for Colorado, and we want to make sure it’s done correctly,” said OCC director Bill Levis.
The consumer office has proposed to effectively quadruple the maximum automatic penalty for benchmark violations to $1 million annually. It also seeks to require Qwest to pay up to $2 million in fines annually if the company fails to fix at least 85 percent of outages within 24 hours. Currently, the company gives customers a credit on their bill if a repair takes longer than a day.
Levis notes that when two smaller phone companies similar to CenturyLink — FairPoint Communications and Hawaiian Telcom — made acquisitions to bolster their footprint, customer service levels dropped. Those companies ultimately filed bankruptcy.
Ward said the comparisons are unfair.
“CenturyLink has a solid track record in that regard, and no fair comparison can be made to the companies the OCC has chosen to reference,” Ward said.
The combined company will be based at CenturyLink’s headquarters in Monroe, La., and serve about 16 million land lines in 37 states.
Andy Vuong: 303-954-1209, avuong@denverpost.com or
Looking at the merger
CenturyLink and Qwest’s plan to join was announced in April.
16 million Approximate number of land lines the merged company would serve in 37 states
85 Percentage of calls for repairs state regulations require Qwest to answer within 60 seconds or pay a monthly fine
$2 million Proposed top annual fines Qwest would pay if it fails to fix at least 85 percent of outages within 24 hours
“This is a big merger for Colorado, and we want to make sure it’s done correctly.”
Bill Levis, director, Colorado Office of Consumer Counsel
