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Qwest says US West purchase would survive regulatory scrutiny

Days after former FCC chairman Reed Hundt said Qwest?s bid raises concerns, a former FCC commissioner sides with Qwest.

Qwest Communications International, which is attempting to purchase US West and Frontier, contended today that the acquisition would not wilt under regulatory scrutiny.

To back up its claim, Qwest released a letter written by James Quello, a former commissioner with the Federal Communications Commission for 23 years, in which he claims that Qwest?s plan to divest long-distance revenues within US West?s 14-state region would satisfy regulators.

The divestment would provide a "simple, quick and effective way" of easing regulatory concerns, Quello?s letter states. His letter was attached to another letter that Qwest CEO Joseph Nacchio sent to US West CEO Sol Trujillo supporting the proposed acquisition.

Nacchio and Quello added that the Qwest bid does not pose any additional regulatory issues not also raised by the competing bid by Global Crossing.

Quello?s entrance into the fray follows speculation last week that the Qwest bid could run into serious regulatory road blocks.

A Qwest-US West combination "would take an exceedingly long time to travel the regulatory minefield and it may well blow up trying," said Reed Hundt, the former chairman of the FCC and now a senior adviser at the McKinsey consulting firm.

Denver-based Qwest, the No. 4 U.S. long distance company, last week raised its takeover offer for US West and Frontier to $54.3 billion after the companies rejected previous offers. US West provides local phone service in 14 Western states, while Frontier is the No. 5 U.S. long-distance carrier.

Qwest expects to complete a nationwide fiber-optic network this month. Bermuda-based Global Crossing is building an undersea fiber-optic cable system. Both seek US West's 25 million customers and Frontier's domestic long-distance network so they can compete with AT&T and MCI WorldCom.

Bloomberg contributed to this report.