FCC SEEKS COMMENT ON QWEST ‘SECRET’ CLEC AGREEMENTS
Controversy in several states about Qwest’s “secret” contracts with some CLECs (CD July 23 p7, June 3 p3) appears now to be complicating FCC’s review of Qwest’s first Sec. 271 petition, due for Commission action by Sept. 11. As part of its review of Qwest’s Sec. 271 petition for Colo., Ia., Ida., N.D. and Neb., FCC late Wed. asked for comment by Aug. 28 on company’s offer to file those previously unfiled contracts for review by relevant state regulators, post them on Web site and make their terms available to other CLECs. Qwest has been criticized by state regulators for not filing all of its CLEC contracts for approval as required by Sec. 252 of Telecom Act. In disputes with PUCs that have been going on for months, Qwest has maintained that those contracts don’t need to be filed because they aren’t directly related to Telecom Act’s interconnection rules. Issue has led to accusations that those unfiled contracts involve deals Qwest made with CLECs to win their support for Sec. 271 entry.
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“Throughout this proceeding, parties have raised numerous concerns regarding unfiled agreements between Qwest and competitive LECs,” FCC said in public notice. Agency emphasized that its call for comments on Qwest’s offer didn’t necessarily mean offer would have bearing on its decision on carrier’s Sec. 271 petition. Commission said it expected original Sec. 271 application to be complete and have all evidence needed for its decision. “If parties in a Section 271 proceeding choose to submit new evidence, however, the Commission retains the discretion to waive its procedural rules and consider the evidence,” restart 90-day review process or give no weight to new evidence, agency said.
Qwest said it would ask state commissions to “approve the agreements as soon as reasonably practicable,” particularly in light of short time left before Sept. 11 deadline for Sec. 271 action. FCC asked Qwest to respond by Aug. 30 to comments on its offer. Qwest Vp Chuck Ward said this issue came up during Sec. 271 reviews by several states, including 5 states included in this Sec. 271 application, and all determined that unfiled contract question wasn’t “Sec. 271 affecting.” Most recently, Ore. regulators said issue had “no bearing on the 271 process,” Ward said. “We made a proposal in the ex parte that we think is a reasonable approach and we're encouraged by the fact that the FCC is taking comments so quickly and in such a short time frame,” he said.
However, AT&T, one of strongest critics of Qwest’s filing practices, said FCC had little choice but to reject Qwest’s Sec. 271 application. “Qwest’s intentional and extraordinarily harmful violations of the Telecom Act have irrevocably tainted their 271 applications and threatened the integrity of one of the FCC’s most important regulatory processes,” company said. In letter sent Thurs. to FCC Chmn. Powell, AT&T said that in exchange for those “secret” agreements, “Qwest demanded the silence of these selected carriers in, among other things, the regulatory proceedings designed to determine Qwest’s compliance with its market- opening obligations under the Act.” AT&T charged that “brokered silence allowed Qwest to give preferential treatment to certain carriers in exchange for hiding damaging data from regulators.”
Qwest said it would submit unfiled contracts to regulators in 4 of 5 states under review -- Colo., Ida., N.D., Neb. It said it already had filed contracts with Ia. Utilities Board in response to recent board order. Qwest told FCC in ex parte letter Aug. 20 that all new contracts were reviewed by committee to determine whether they involved any Sec. 252 obligations and thus should be filed. “With regard to older agreements… Qwest has no objection to offering all CLECs in a state the same going forward terms it gives under contract to one local carrier,” it said. “However, Qwest does not concede that all contracts with CLECs require prior approval and has been concerned that extending such offers might be read as an admission regarding the scope of Sec. 252’s mandatory filing requirements.”
Qwest said that when it submitted contracts it would redact “those contract terms that relate solely to the specific CLEC and do not create ongoing obligations, such as confidential settlement amounts relating to resolution of historical disputes between Qwest and the particular CLEC.” It said it would make similar filings in 4 other states where it had sought Sec. 271 approval -- Mont., Utah, Wash., Wyo. Company concluded: “Qwest is taking this action as a good- faith gesture [but] Qwest continues to believe that Congress did not intend all ILEC-CLEC contractual arrangements with a nexus to Section 251 to be formally filed for review, let alone those contracts that do not relate to Section 251 obligations.”