CLEC News Briefs

• Qwest Avoids State-Ordered Breakup
• ALLTEL's DSL Lite
• McLeodUSA Slims Down Product Offerings

by ISP-Planet Staff [November 25, 2002]

Qwest Avoids State-Ordered Breakup
Qwest Communications dodged a regulatory bullet last week when Minnesota regulators decided against splitting its in-state operations in two.

Rather than fining Qwest up to $195 million for violating federal laws regarding local telephone competition, the Minnesota Public Utilities Commission sided with Qwest's lawyers, who argued that harsh penalties would hurt the company and its customers.

Come January, state regulators will chose between two options; fine Qwest a maximum of $75 million, deferring all but $10 million in penalties if the company abides by new rules to promote competition in the state; or enforce stiffer competitive requirements on Quest, while allowing it to escape monetary fines altogether.

Last month, the PUC discovered that Qwest had tried to undercut competitors by striking secret deals benefiting some local phone companies over others. The competitors who made the agreements received discounts on the rates for access to Qwest's network, while rivals had to pay more for the same services.

The PUC ruling grew out of a complaint filed in February by the Minnesota Department of Commerce. The Commerce Department had wanted the PUC to order Qwest split in two—a policy known as structural separation. Failing that, the Commerce Department wanted the PUC to severely fine Qwest and put the company's bid for to entering the Minnesota long-distance market on hold.

Ultimately the PUC's actions should force Qwest to treat other phone companies more fairly and improve the service it offers in the state. Qwest said it would give a 10 percent discount to local telephone competitors who didn't benefit from the secret agreements, and hire an independent company to monitor its compliance with PUC policies on agreements with competitors. Qwest said it would hire the monitoring firm regardless of what the PUC decides in 2003.

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ALLTEL's DSL Lite
ALLTEL recently introduced a new high-speed Internet access program dubbed DSL Lite, priced to break the $50 a month barrier associated with standard residential broadband service fees. The company is also offering a new service that allows customers to share their high-speed connection across multiple computers without cables.

Customers can bundle unlimited Internet service from ALLTEL with a DSL Lite connection for $35 per month, a lower price than other high-speed connections. ALLTEL's regular DSL service starts at $49.95 per month, delivering data speeds up to 1.54 Mbps. DSL Lite features download speeds of up to 256 Kbps, allowing customers to access the Internet at a rate of speed that is about twice as fast as a 128 Kbps ISDN line.

Additionally, customers who agree to a one-year contract for DSL Lite receive a free modem. The modem is delivered to customers complete with the hardware and software required for self-installation, so there are no truck-roll expenses to recoup.

ALLTEL's new home networking option allows DSL customers to access the service anywhere in their homes by using wireless routers and network cards. With this service, customers also can share their high-speed connection across multiple devices without cables.

[Details to come. ]

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McLeodUSA Slims Down Product Offerings
McLeodUSA, Inc., one of the nation's largest independent competitive local exchange carriers, has launched a telecommunications bundle.

The company says the move was made to support the company's strategic goals to simplify its product offerings, streamline its business processes, and significantly enhance customer services.

McLeodUSA's new Preferred Advantage product offering includes simple packages for local, long distance, Internet, and voicemail services for residential customers as well as small- and medium-sized businesses.

Chris A. Davis, McLeodUSA chairman and chief executive officer, said the launch of the program is a key step in executing the company's strategic plan to focus on profitability.

"McLeodUSA's new management team is focused on the value proposition of simplicity, integrity and world-class customer service," Davis said. "These newly developed products and service offerings are designed to support a scalable sales process across a broad customer base and significantly improve the customer experience through value-added solutions, competitive pricing, and one integrated and easy-to-understand bill with no hidden charges."

The new products and services will be implemented in stages across McLeodUSA's established sales territory as tariffs are filed and approved by the state regulatory commissions. McLeodUSA expects that all of its markets will have access to the Preferred Advantage product offerings by January 2003.

Based in Cedar Rapids, Iowa, McLeodUSA is another notable survivor of the dot-com crash, having emerged from bankruptcy in June. McLeodUSA buckled last year under a heavy debt load, having overxtended its financial resources as a national wholesale carrier. Over the last several months, McLeodUSA has shed several non-core businesses, including its wholesale ISP, directory publishing, and customer premises equipment units.

Through its reorganization plan, McLeodUSA eliminated $3 billion in bond debt and raised $175 million through majority investor Forstmann Little, which now own approximately 58 percent of the company. McLeodUSA currently provides integrated communications services, including local phone services, in 25 states across the U.S.

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Related articles:
	[July 22, 2002]	McLeod Sells Illinois Telephone Firm
	[April 30, 2002]	Qwest Facing Another Probe?
	[Feb. 4, 2002]	Give Structural Separation A Chance