Qwest faces new collusion probe

Telecommunications carrier Qwest Communications International is under suspicion of striking secret deals with competitors who...

Telecommunications carrier Qwest Communications International is under suspicion of striking secret deals with competitors who agreed not to oppose Qwest's rapid expansion, according to the Wall Street Journal.

An example of such a deal would be where Qwest offered a smaller carrier discounts for using Qwest's infrastructure, on the understanding that the carrier would not oppose Qwest's submission to operate long-distance services in that market, according to the WSJ.

The 1996 Telecommunications Act dictates that regional phone carriers in the US, such as Qwest, provide non-discriminatory access to their services, so that an agreement struck with one local provider should be freely available to all, the WSJ said.

According to the WSJ, several US states have been investigating these allegations for up to a year. Qwest, fearing a series of separate state hearings, has now asked the US Federal Communications Commission (FCC) to intervene and rule on whether it violated any regulations. The FCC has not yet decided whether to step in, the WSJ said.

The states conducting investigations include Minnesota, Arizona, Oregon, New Mexico, Colorado and Utah, according to the WSJ.

The allegations against Qwest add to its legal problems. The company is already facing a probe by the US Securities and Exchange Commission (SEC) into whether it misleadingly inflated revenues in 2000 and 2001.

Earlier this month the SEC began a formal investigation into accounting procedures at Qwest, covering how Qwest recognised revenue and accounted for sales of optical capacity and matters relating to its sale of telecommunication equipment to customers who either purchased Internet services from Qwest, or who received financing from the company.

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