Qwest getting price controls lifted

DENVER — Qwest Communications International Inc. may have been the loser in the high-stakes bidding war for MCI Inc., but the company is quietly waging a much more successful campaign to sell its services without government looking over its shoulder.

So far, Denver-based Qwest has persuaded eight of the 14 states it serves — including Utah — to at least partially lift price controls on things like voice mail, caller ID and call forwarding. It's something the other Baby Bells are also pursuing amid burgeoning competition from cell phone carriers and Internet-based services.

The push has some consumers concerned that deregulating any price control could end up putting the cost of basic phone service out of reach.

"What do we do when all these prices go up?" asked Fred Wilhoft, a 69-year-old retiree in suburban Golden, Colo. He said his neighbors could end up choosing between paying for phone service or prescriptions in any given month.

The deregulation effort is part of Qwest's overall strategy to position itself for the future after losing out to Verizon Communications Inc. for MCI. Qwest has some hurdles to jump — it is saddled with about $17.3 billion in total debt and it lacks a wireless division as cell phone service soars across the country.

One of Qwest's biggest challenges is to sign up customers for its nationwide fiber-optic network. CEO Richard Notebaert told stockholders in the past week he plans to achieve that goal by acquiring smaller companies or perhaps the assets of larger firms — similar to buying the parts and then building a vehicle. He declined to be specific.

Analysts figure Qwest needs to make something happen soon.

"This is their chance to try to do something. They'll be able to show sort of stabilizing revenues and decreasing costs," said Donna Jaegers, a telecommunications analyst with Janco Partners Inc.

The deregulation campaign, however, has been under way for months.

State and federal regulations have been place for decades for companies like Qwest, which absorbed US West in a 1999 merger; US West was one of seven companies formed to provide local phone service when the Bell system broke up in 1984. The regional Bells were later allowed to compete in the long-distance market, but they had to lease network access to competitors.