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FOR IMMEDIATE RELEASE
March 06, 2000
AG's Office Reaches Settlement on US West-Qwest Merger


Olympia -March 6, 2000 - A settlement announced today involving the planned merger of US West and Quest Communications is designed to ensure that Washington customers receive adequate and affordable service from the merged company, Attorney General Christine Gregoire said.

The agreement was reached by the Attorney General's Office, the staff of the Washington Utilities and Transportation Commission (WUTC), US West, and Qwest. The agreement now must receive approval from the WUTC, and will only become binding when the companies complete the merger.

Last month the Attorney General's Office recommended to the WUTC that the merger be denied unless service quality is imposed.

"This settlement addresses our principal concerns with the proposed merger," Gregoire said. "Conditions in the agreement should ensure that the merger benefits Washington consumers by creating powerful incentives for the company to provide good service, and to compensate customers if service is not at the level they deserve."

Among other things, the agreement includes a customer "bill of rights," an expansive service quality performance program and a three-year general prohibition on rate increases.

Under the agreement, the merged company will provide customers with credits on their bills for missed installations, missed appointments, out-of-service conditions and repair problems. Additional credits, totaling as much as $20 million annually, will be payable starting in 2002 if the company fails to meet benchmarks contained in the agreement.

"The service quality performance program is unique to Washington and unmatched in size and scope," said Gregoire.

"The settlement provides US West with a financial incentive to meet the minimum service targets currently in place, and provides customers with compensation if performance lags expectations," said Assistant Attorney General Simon ffitch (cq).

Other conditions in the agreement include:

  • Replacement of remaining analog switches with digital equipment and increased fiber optic network investment in Washington.
  • A commitment to maintain investment in Washington and to serve some areas currently without telephone service.
  • A prohibition against passing along merger costs to consumers.
  • A commitment to help improve participation in the existing telephone assistance program for low-income customers.

The commission is expected to consider the proposed settlement, as well as unresolved issues pertaining to competition, at hearings in mid-March. It may rule this summer.

The merger also requires approval from the Federal Communications Commission and regulators in other states served by US West.

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