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This is an unofficial announcement of Commission action. Release of the full text of a Commission order constitutes official action. See MCI v. FCC. 515 F 2d 385 (D.C. Circ 1974).
| FOR IMMEDIATE RELEASE March 10, 2000 |
NEWS MEDIA CONTACT: Mike Balmoris at (202) 418-0253 Email: mbalmori@fcc.gov |
FEDERAL COMMUNICATIONS COMMISSION APPROVES
QWEST / US WEST MERGER
Washington, D.C. - Today, the Federal Communications Commission (FCC) approved applications to transfer control of licenses and lines from US WEST, Inc. (US WEST) to Qwest Communications International Inc. (Qwest). This approval is subject to the Commission's determination that Qwest's divestiture of its long distance customers in US WEST's region complies with its legal requirements to cease providing interLATA, or long distance, services in US WEST's territory. Additionally, Qwest's divestiture and the Commission's approval must be completed prior to closing the merger.
As a BOC, US WEST is prohibited from providing interLATA services within its territory until the Commission determines that US WEST has fulfilled its legal requirement to open its local telecommunications markets to competition. Qwest provides long distance services in US WEST's territory, which if not divested would violate this prohibition.
In its review of the merger transaction application, the Commission identified two merger-specific public interest benefits. First, the merger creates powerful new incentives for US WEST to open its local telecommunications markets to competition because the merged company will have increased motivation to comply with Section 271 of the Communications Act. Section 271 spells out a fourteen-point competitive checklist that each Regional Bell Operating Company (BOC) must satisfy before it can provide long distance services. The fourteen-point competitive checklist includes legal obligations to:
- Interconnect with local competitors;
- Provide access to unbundled network elements to competitors;
- Resell telecommunications services; and,
- Collocate with competitors.
US WEST must fulfill these obligations before it can achieve 271 authority to offer long distance services within its region. After the merger, Qwest, as a long distance provider and owner of a substantial Internet backbone, will not be able to offer interLATA services in the US WEST region until US WEST complies with section 271, the fourteen-point competitive checklist.
Until Qwest and US WEST satisfy their section 271 obligations, they will not be able to make full use of Qwest's long distance network and Internet backbone. Thus, in order to be more competitive in its out-of-region long distance service, and obtain maximum growth in its out-of-region business, Qwest will need to affirmatively pursue the legal ability to offer in-region long distance services.
Second, the merger will serve the public interest by promoting the goals of section 706 in the 1996 Telecommunications Act, which encourages the deployment of advanced telecommunications services. Combining US WEST's expertise in providing Digital Subscriber Line (xDSL) to the local loop with Qwest's high speed, high-capacity network will expedite deployment of advanced services on a broader basis than US WEST could have offered alone.
The Commission's ruling today requires that prior to closing the merger, the applicants must submit a full report identifying the buyer of the divested businesses; details on any and all activities provided by the merged entity on behalf of the buyer; the term sheets; and the contract of sale, including any agreements related to the support services. The Commission will review the submissions and comments and will issue a ruling on whether or not the proposed divestiture and associated business relationships with the buyer results in a merger that complies with section 271.
Action by the Commission March 8, 2000 by Memorandum Opinion and Order (FCC 00-91). Chairman Kennard, Commissioners Ness, Powell and Tristani, with Commissioner Furchtgott-Roth concurring in part, dissenting in part and issuing a separate statement.
CC Docket No.: 99-272
Common Carrier Bureau contact: Henry Thaggert at 202-418-7941
on the Commission's web site www.fcc.gov.