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AT&T complains to FCC about Qwest

Ma Bell has filed a complaint accusing Qwest of illegally supplying long-distance phone service. But Qwest says the accusation is without merit.

AT&T has filed a complaint with the U.S. Federal Communications Commission, accusing Qwest Communications International of illegally supplying long-distance phone service, the company announced Monday.

AT&T said Qwest is supplying long-distance service within its 14-state local area in violation of both the Telecommunications Act of 1996 and the conditions of its merger with US West.

Qwest spokesman Steve Hammack said the complaint was without merit.

Qwest agreed to sell its long-distance phone service to Touch America as part of its merger agreement with US West in 2000, a deal that also made the telecom carrier a Baby Bell phone company and subject to regulation under the Telecommunications Act.

The Telecom Act requires all Baby Bell phone companies, such as Verizon Communications, BellSouth and SBC Communications, to open their local networks to competition in exchange for earning the right to offer long-distance services.

Qwest has not been granted approval in any of its states, while Verizon and SBC have made some headway.

In its complaint filed with the FCC last week, AT&T said Qwest is still offering long-distance service to business customers through private-line agreements and through the company's own telecom network, which is meant to provide service only to Qwest itself.

Touch America filed a similar complaint with the FCC against Qwest earlier this year, accusing the carrier of not fully divesting its long-distance business.

Qwest sued Touch America last August for not paying for network services that Qwest provided.

AT&T's actions come as Qwest faces questions about its financial health, complaints from other carriers, and an investigation of its accounting practices by the Securities and Exchange Commission.

The company is also preparing to apply for long-distance approval within its region, which has led some industry observers to question the timing of the complaint filed by AT&T, which has locked horns with the Bells in the past.

"This is AT&T bringing up old news just before Qwest files a series of long-distance applications in several states," said Michael Balhoff, an analyst at Legg Mason.