PUCs SAY ‘SECRET CONTRACTS’ SHOULDN'T DELAY QWEST 271 ACTION
Responding to FCC request for comment on Qwest’s “secret” contracts with CLECs, Ore. PUC told Commission Tues. that it had reviewed 78 such contracts in state and concluded “Qwest should have filed many but not all of these agreements.” Ore. PUC Comr. Joan Smith said in letter to FCC that PUC was working with Qwest “to develop a list of the agreements that should be filed” and if no agreement were reached, PUC could open formal investigation. She said that although AT&T had raised issue of unfiled contracts as part of Ore.’s Sec. 271 proceeding, “we concluded that any impropriety related to failure to file the contracts in question was not significant enough to cause us to delay making an affirmative recommendation to the FCC.” Qwest hasn’t made application to FCC for Ore. yet.
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Qwest has been under gun for several months for not filing all of its CLEC contracts with state regulators as required by Telecom Act. Company had taken view that many of those contracts didn’t involve interconnection issues subject to Telecom Act filing requirement. However, Qwest on Aug. 20 offered to file previously unfiled contracts for review by relevant state regulators to avoid jeopardizing Sec. 271 proceedings at FCC (CD Aug 23 p1). Commission asked for comments by Wed. on effect of issue on Qwest’s pending Sec. 271 application for Colo., Ia., Ida., N.D., Neb. FCC is required to act on that petition by Sept. 11. Issue also could color 2nd Qwest application, for Mont., Utah, Wash. and Wyo., which is due for FCC action by Oct. 10.
Ida. PUC (IPUC) also told FCC Wed. that Qwest had filed several previously unfiled contracts, as promised, and IPUC would review them but probably wouldn’t finish by deadline for FCC action on Qwest’s application. However, IPUC told FCC it “does not believe Qwest’s filing of the agreements with the IPUC should affect the FCC’s consideration of Qwest’s Section 271 application.” Other PUCs were expected to make similar filings.
AT&T met with Commission staff Mon. to urge denial of Qwest’s application, saying unfiled contracts created questions of discrimination. In ex parte filing describing its meetings, AT&T said it explained to staff that “Qwest’s Aug. 20 proposal to file some of the secret interconnection agreements in its region did not cure the discrimination issues caused by Qwest’s secret deals” nor erase concerns that operations support system tests might have been “tainted by preferential treatment given to CLEC secret deal recipients.”
In related matter, Qwest’s financial accounting problems are playing role in FCC’s review of company’s Sec. 271 application. Qwest CFO Oren Shaffer told Commission in Aug. 20 letter that company no longer could assure agency that it was in compliance with generally accepted accounting principles (GAAP) as required. Shaffer said Qwest’s internal investigations had identified “accounting transactions… that did not comply with the requirements of GAAP.” Qwest earlier this week submitted revisions in 2 applications for long distance entry to reflect financial compliance questions. Shaffer told agency that GAAP problem shouldn’t have effect on either application because it didn’t relate to open-market obligations required by Sec. 271. Nor, he said, does it have impact on related Sec. 272 affiliate relationship obligations. Qwest plans to restate its financial statements for prior periods once internal analysis is done but in meantime it wanted application to reflect situation as it was now, Shaffer said.