And the other shoe drops to the floor: Consumer Necessities and Convenience by USWest:
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Do What's Best for Consumers, U S WEST Asks FCC, as
Final Arguments Are In on Popular Long-Distance Teaming
Program With Qwest
July 8, 1998
DENVER, July 7 /PRNewswire/ via NewsEdge
Corporation -- With legal arguments for all sides now in
related to its Buyer's Advantage long-distance marketing
alliance with Qwest, U S WEST (NYSE: USW) today
urged the Federal Communications Commission (FCC) to
decide quickly on the merits of the program -- and do
what's best for consumers.
"Ultimately, the issue isn't what's best for U S WEST or
Qwest or AT&T or MCI," said Solomon D. Trujillo,
president and CEO of U S WEST. " The issue is -- or
should be -- what's best for American consumers."
Trujillo noted that "AT&T and MCI have conceded
publicly that the Buyer's Advantage program is a good
deal for consumers. They've even said they might join
with us to make a similar offer to consumers if they can't
kill Buyer's Advantage on the legal front."
Last month, a federal court in Seattle issued a temporary
injunction prohibiting U S WEST from continuing to
market and take customers' orders for Qwest's
10-cents-a-minute interstate long-distance service under
the Buyer's Advantage program. The court referred the
case to the FCC, asking the commission to rule on the
legality of the program under the Telecommunications
Act of 1996.
In comments filed with the commission on June 26, U S
WEST included extensive comments about the benefits
the Buyer's Advantage program offers to consumers.
AT&T, MCI and a coalition of other companies trying to
kill Buyer's Advantage filed their comments with the
commission by July 1, the deadline set by the FCC for
reply comments.
"The thing I find amazing," Trujillo said, "is that the
companies who want to kill Buyer's Advantage don't
mention consumers at all in their comments to the FCC.
Not once. Have they become so involved fighting legal
battles that they've forgotten about the one group that
really matters -- customers?"
"It's especially galling," Trujillo said, "that AT&T
continues to fight Buyer's Advantage in the wake of its
own proclaimed plan to create -- in their words -- an
'unprecedented powerhouse' through their merger with
TCI. That merger will make AT&T the nation's biggest
long-distance company, biggest cable TV operator,
biggest independent local phone company and biggest
wireless phone company all rolled into one. Why do they
need protection from competition?"
Some of the points U S WEST made in its filing with the
FCC:
-- "It is not a mystery why AT&T and MCI may have
lost customers to Qwest during the three weeks that U S
WEST's Buyer's Advantage program operated:
Customers learned that Qwest offered significantly
cheaper long-distance services than either of the giants.
The average residential customer in U S WEST's region
had, for the past three years, paid more than 16 cents per
minute for long-distance (interLATA) service. Qwest
offered those same customers a simple, day-and-night
rate on interstate calls of 10 cents per minute."
-- "All it took for these customers to switch was to know
about Qwest's offer. U S WEST did not suggest that
Qwest's long-distance services were its own. Nor did U S
WEST disparage the services of any other carrier or
deny customers the right to choose another carrier. It did
not offer customers special prices or terms on U S WEST
services if they chose Qwest. And U S WEST did not
give Qwest superior interconnection, cheaper exchange
access, or any other special benefit that would have
enabled Qwest to provide customers with better-quality
long-distance service than its rivals. The only thing U S
WEST provided was an avenue for giving customers
accurate information about Qwest's simple low prices."
-- "In three weeks, fully 130,000 customers who had
learned about Qwest's prices through Buyer's
Advantage chose to switch. But instead of meeting
Qwest's initiative with a competitive response in the
marketplace, the Complainants asked a court and now
the Commission to prevent their far smaller competitor
from using a marketing channel that had proven too
effective for their comfort."
-- "The sad irony is that AT&T and MCI -- with $57
billion in long- distance revenues last year, and nearly
80% of the nation's presubscribed residential telephone
lines -- are using the procompetitive Telecommunications
Act as a weapon to preserve their dominance of the
long-distance market ... AT &T and MCI turn Congress's
intent on its head when they twist a statute whose stated
purpose is '(t)o promote competition ... in order to secure
lower prices and higher quality services for American
telecommunications consumers' into a shield against a
smaller rival's attempt to publicize its lower rates. "
-- "The position that AT&T and MCI advocate would
thwart competition by depriving customers of choice and
of information useful in choosing telecommunications
services. Teaming arrangements such as Buyer's
Advantage allow customers to obtain the simplicity and
convenience of one-stop shopping for local and
long-distance services. They also afford smaller
long-distance carriers a low-cost marketing channel that
better enables them to compete by informing consumers
about their offerings."
-- "A program such as Buyer's Advantage increases
choice for everyone and reduces it for no one:
Consumers retain all other options previously available
to them; U S WEST and Qwest retain all other avenues
of competition; and other long-distance carriers may
choose to participate or to pursue any other marketing
strategy."
-- "Qwest is an emerging facilities-based long-distance
provider based in Denver, Colorado, with less than 2% of
the long-distance market, compared to the over 75% that
AT&T and MCI together control. Qwest has a
state-of-the-art fiber optic network, offers low rates, and
has steadily built a name for itself, but it has nowhere
near the market power, name recognition, or advertising
budget that the long-distance giants have. Qwest
entered into the Teaming Agreement with U S WEST in
an effort to compete more vigorously and efficiently
using a new, cost-effective marketing channel."
-- "Buyer's Advantage offers customers convenient
one-stop shopping, although it is carefully structured
not to lock customers into U S WEST's or Qwest's
service offerings, tie those offerings together, or disable
any other local or long-distance carrier from competing.
Qwest's same 10-cent all-day rate is tariffed and available
to customers even if they do not participate in Buyer's
Advantage. Similarly, U S WEST's services are available
at the same tariffed price outside the program."
-- "Customers can mix and match single or multiple
services from U S WEST, Qwest and even third parties;
there is no price break for selecting a particular
combination of services from Qwest and U S WEST, and
there is no minimum package that must be purchased.
(Thus, AT&T and its co-Complainants are simply wrong
when they assert that customers must accept U S
WEST's intraLATA toll services in order to receive
Qwest's favorable long-distance rate.) In short,
participation in the program comes without strings: A
customer may take only what she or he wants, in any
desired combination. Buyer's Advantage simply gives
the customer a convenient single point of contact for
ordering U S WEST's and Qwest's services."
-- "As the Teaming Agreement itself makes clear, the
arrangement between U S WEST and Qwest is
nonexclusive, and expressly permits both carriers to
enter into similar arrangements with other carriers. U S
WEST has stated unambiguously that other carriers may
participate in the program on the same terms as Qwest, or
with lower long-distance prices. Moreover, U S WEST is
willing to consider alternative teaming arrangements
should a prospective teaming partner propose them."
-- "AT&T and MCI initially declined to take advantage
of the opportunity, although they have subsequently
shown a change of heart: They have publicly declared an
interest in teaming with U S WEST, even as they protest
in their litigation papers that participation would be
unthinkable to them. Meanwhile, other carriers have
continued to discuss the possibility of teaming with U S
WEST, even while AT&T's and MCI's litigation is
proceeding."
U S WEST (NYSE: USW) provides a full range of
telecommunications services -- including wireline,
wireless PCS, data networking, directory and information
services -- to more than 25 million customers nationally
and in 14 western and midwestern states. More
information about U S WEST can be found on the
Internet at uswest.com.
SOURCE U S WEST
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