AT&T filed complaints with five state regulators today detailing charges of slow or inadequate service by US West in connecting its long distance customers. Additionally, Colorado state officials are preparing a hearing on customer complaints, while Washington state regulators are now investigating reports of an increasing number of phone problems.
The complaints raise growing questions about how well US West and Qwest will be able to provide basic telephone service--particularly in rural areas--as they together focus on the sexier high-speed Internet and data business.
To be sure, many of the complaints facing US West are in part politically motivated. "AT&T has significant reason to disparage US West," said Rex Mitchell, a telecommunications analyst with Bank of America Securities. "US West is merging with Qwest, one of its most significant competitors."
But many observers point to something more than spin behind the problems. Analysts and state regulators say in recent years US West has been the target of many telephone service complaints, even as it pushes ahead with high-speed Internet services and other high-tech trial projects.
"AT&T's complaints are absolutely founded in reality," said Lisa Pierce, director of global telecommunications research for the Giga Information Group. "I worry that things are going to get worse if [Qwest CEO] Joe Nacchio gets his hands on the company."
Phone service suffers
At the core of AT&T's filed complaints was the claim that US West is starving its traditional telephone business while expanding its data and Internet business that proved so attractive to Qwest.
In filings with state regulators in Arizona, Colorado, Minnesota, New Mexico, and Washington, AT&T said US West had failed to follow though on promises to connect services for AT&T customers, and refused to construct facilities that would handle new network traffic. That has led to some AT&T customers either waiting a long time or failing to have their calls connected altogether, the company said.
"We've given up on US West's word that they're going to improve service," said Mark Trierweiler, an AT&T vice president for public relations. "They have broken a lot of promises."
US West quickly responded, saying AT&T was simply trying to undermine its merger with Qwest. That merger, if completed, would provide stiff competition for AT&T in the high-speed Internet, and eventually long distance, business.
A company spokesman said US West plans to invest a total of $4 billion in its network this year, with the vast majority of that sum going to functions outside its high-profile broadband Internet services.
Nevertheless, some analysts said US West--along with other phone companies--is focusing on its new data business to the detriment of its traditional telephone service.
"Legally that's not supposed to happen," Pierce said. "But I think it is widely done in this industry. And I don't think US West is alone in that. I think AT&T has done that too."
Others said US West had in fact lost its focus on traditional telephone service earlier in the decade, when it owned the MediaOne cable company, and is now still trying to make up ground.
"It's really expensive to catch up," Mitchell said. "It's better to keep up over time." The company is now building its network back up to the level it needs to be, the analyst added.
Whatever the truth, US West does have considerable ground to cover before convincing regulators--and many of its customers--that it is providing the highest level of service possible.
In Washington State, regulators recently ordered the company to complete transactions made by MCI WorldCom customers, and are now looking at complaints that the Baby Bell hasn't followed through on that demand. In that state, US West consistently prompts more consumer complaints per capita than do Sprint and GTE, the other local phone companies, according to a Utilities and Transportation Commission spokesman.
In Colorado, regulators have scheduled hearings in November that concentrate on consumer complaints over phone line installation times and the amount of service problems filed against the company.
Regulators at the state and federal level will be looking at these issues as they approve the merger between Qwest and US West, and both companies will have to prove they will not allow the traditional telephone service to fall by the wayside.
"My concern is that with the Qwest merger things aren't going to get better," Pierce said. "They're going to go downhill."