QWEST TO PAY $6.5 MILLION FOR SEC. 271 VIOLATIONS
The FCC entered a consent decree with Qwest Wed. in which the company agreed to pay the govt. $6.5 million and admitted violating a ban on providing long distance in its territory before receiving Commission approval. The payment eclipses a $6 million fine the FCC levied on SBC in Oct. for violating a condition of its 1999 merger with Ameritech, which the agency touted at the time as its largest fine ever.
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Under the agreement, Qwest admitted violating a federal ban on providing long distance in its local service region before receiving long distance authorization from the FCC. It also acknowledged violating parts of the Qwest-U S West merger order that barred it from providing certain services before receiving FCC approval. Enforcement Bureau Deputy Chief Anne Weismann said it was the first time the Commission had entered a consent decree involving providing long distance service. In March, Verizon agreed to pay a $5.7 million fine (CD March 5 p4) for marketing, rather than providing, long distance in its local service region on 5 occasions in Jan.-July 2002 before receiving authority from the FCC.
The FCC said the decree resolved its investigation into the company’s possible violation of Sec. 271 of the Communications Act, which bars Bell companies from providing long distance in their local service regions before receiving approval. The Commission said its investigation also involved possible violation of Sec. 272 of the Act, which bars RBOCs from marketing or selling long distance service in their region before receiving Sec. 271 approval. Qwest, under the consent decree, admitted to providing long distance service originating in its local region in 4 separate incidences in violation of Sec. 271. It also said it provided services on 8 separate occasions that were in violation of the Qwest-U S West merger order.
A Qwest spokesman said the agreement was disclosed by the company before the Commission released the order, which “just takes a whole string of public disclosures and puts a twist on it.” He said “we're pleased we've resolved these issues cooperatively with the” Commission. As part of the compliance plan, Qwest said it would fully implement supplemental changes in its order entry process designed as further controls to prevent the completion of an order for the providing in-region, interLATA private line services in either Ariz. or Minn. until the Commission granted its Sec. 271 applications for those states. It said it would maintain those procedures until it received Sec. 271 authorization in all of its states.
An AT&T spokeswoman said the FCC action was “too little and too late. Despite the obvious evidence that Qwest was violating the law, the FCC continued to approve Qwest’s applications to provide long distance service and allowed them to profit from its unlawfulness.” She said the prudent course should have been to hold up any Sec. 271 applications until the violations had been investigated thoroughly: “By not doing that, today’s action by the FCC is just window dressing.” The FCC unanimously approved the order Mon. and announced it Wed.