FCC gives thumbs-up to vertical telecom merger of Qwest, US West

FCC gives thumbs-up to vertical telecom merger of Qwest, US West

By William Jackson

GCN Staff

The Federal Communications Commission has approved the merger of two Colorado companies: a regional Bell carrier and a broadband fiber-optic network company.

FCC gave its blessing to the union March 10. Qwest Communications International Inc. of Denver and US West Inc. of Englewood, Colo., had announced merger plans last year.

James F.X. Payne, senior vice president of the Qwest Government Systems Division, said the merger will be vertical, with offerings at both ends of the service spectrum, rather than horizontal, with competing services. Payne headed government market activities at Sprint Corp. before moving to Qwest last year.

The combined company, which will use the Qwest name and be headquartered in Denver, will have more than 3.4 million miles of deployed fiber worldwide and a U.S. network that is almost entirely digitally switched.

FCC approval is the last federal regulatory hurdle for the merger. The Justice Department, the Federal Trade Commission and the Securities and Exchange Commission approved it last fall, as did shareholders in both companies. About half of the state utility commissions in the two companies' operating areas have given approvals.

FCC is requiring Qwest to divest itself of long-distance customers in US West's service area before the merger is complete around midyear.

The company will expand offerings to federal agencies but its focus will continue to be on the backbone, Payne said.

'I'm telling my customers I am anxious for their voice and everything they've got, but what I'm targeting is broadband and Internet services,' he said.

Qwest in December opened a 50,000-square-foot CyberCenter in Sterling, Va., for outsourced services ranging from Web hosting to data center operations. Plans call for expanding the facility to 300,000 square feet.

'The demand is more than we anticipated,' Payne said. He said he expected to announce the CyberCenter's first federal customer before the end of the month.

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