Qwest, U S West Merger Endorsed
By WALTER BERRY, Associated Press Writer
PHOENIX (AP)- The Arizona Corporation Commission on Friday endorsed the proposed $52 billion merger between U S West Inc. and Qwest Communications International Inc., clearing the way for federal approval.
Arizona was the last in U S West's 14-state service area to sign off on the merger of the two Denver-based telecommunication companies.
``I think that with under the terms and conditions agreed to, this merger is in the best interest of the public,'' said Jim Irvin, one of three Arizona commissioners on a panel that oversees the state's utilities.
The proposed merger now awaits final regulatory approval from the Federal Communications Commission. The companies hope to close the deal in the next few months.
U S West, one of the Baby Bells created by the 1984 breakup of AT&T Corp. (NYSE:AWE - news), is one of Arizona's largest telephone carriers with 1.8 million lines. Qwest is the nation's fourth-largest long-distance carrier and first sought to buy U S West for an estimated $45 billion last June.
The combined company, to be headquartered in Denver and called Qwest Communications International Inc., plans to employ about 64,000 people worldwide and serve 29 million customers.
It would have more than $70 billion in market capitalization, more than 3 million miles of fiber-optic cable in the United States, Europe and Asia, and a local network that is 99.2 percent digitally switched.
As part of Arizona's approval, the commissioners passed several conditions, including one to make the new Qwest spend more than $48 million per year to upgrade telecommunication service in rural areas of the state.
``Rural customers will otherwise be neglected by a company concentrating on broadband services,'' said Scott Wakefield, chief counsel for the Arizona Residential Utility Consumer Office that was seeking an average upgrade of $300 per line at 30 rural wire centers for the next five years.
The Arizona commission also pushed through provisions to make the merged company protect the pensions of current and retired U S West employees, develop more minority recruitment for its work force and create a seven-member task force to look at service-quality issues. U S West has been dogged by continual customer complaints in Arizona.
``We believe one of the root issues in poor telephone service is inappropriate staffing level of qualified and trained employees,'' said Joe Gosiger, president of the Communications Workers of America Local 7019. ``The feast or famine approach to staffing, which is common within my industry, needs to stop.'' |
