Business News - Qwest, US WEST Merger Means Changes for Channels

By Tara Seals

Posted: 09/2000

Qwest, US WEST Merger Means Changes for Channels
By Tara Seals

Among the necessary changes resulting from the Qwest Communications International Inc.
(www.qwest.com) and US WEST merger will be a reorganization of the channel divisions.

To begin with, resellers for the companies will be consolidated under Greg Casey, Qwest’s executive vice president of the wholesale division.

John Huddleston, Qwest’s director of wholesale markets, says he expects new services to be available to the resale channel in the fourth quarter, with a full roster of US WEST resale products by the first quarter of 2001.

“We’re going to lose some revenue opportunity in-region, but we plan to recoup that with new services in the US WEST product availability,” says Huddleston.

Those services may include DSL, dial-up Internet access and wireless products.

What Qwest loses is long-distance services.

For the merger to meet federal requirements, Qwest had to divest itself of long-distance services within US WEST’s 14-state territory. That also means Qwest agents and resellers are prohibited from selling such services in-region as toll-free, 1+ and private line with in-region endpoints.

But Qwest already is working on the FCC guidelines that will permit it to re-enter the long-distance market.

Nik Nesbitt, vice president of the Qwest business partner program, says one of Qwest CEO Joe Nacchio’s “eight top priorities” is to gain relief from the FCC restrictions so it can sell long distance in the region within 12 months.

“The difference between us and the other RBOCs is that they’re coming from a space where their whole business has been local, and they’re trying to get into long distance,” Nesbitt explains. “We’re coming from the long-distance side, and we’ve inherited the local. We can’t wait to open our territory up to competition. So we’re going to be extremely aggressive with the FCC and the state regulators to prove to them that it’s a competitive world in Qwestland, and we can get back into the long distance.”

In the meantime, agent contracts for long distance have been turned over to the Montana Power Company’s
(www.mtpower.com) subsidiary Touch America Inc.
(www.tamerica.com).

“We carved out equipment and lines and gave them to Touch America, along with a lot of people–sales, engineers, supervisors and techs,” Nesbitt says. “The people basically running the network, and the network itself, are all ex-Qwest. Even though we can’t do any comarketing with Touch America going forth, we know all of those guys, and in many ways agents will be selling the same services.”

The merger also brings new services to Qwest agents. The carrier inherits US WEST’s 5-year-old division known as “!nterprise,” which focuses on portals, web hosting, web applications and Internet access.