Colorado regulators opened a formal inquiry Thursday into agreements Qwest Communications International Inc. made with its wholesale customers.
The inquiry was prompted by an investigation in Minnesota, in which an administrative law judge ruled last month that Qwest violated federal law through secret agreements that favored some of its telephone competitors over others.
In February, the Colorado Public Utilities Commission began an informal inquiry into whether Denver-based Qwest struck similar deals in Colorado.
The Minnesota agreements provided local competitors with discounted telephone services from Qwest, Judge Allan Klein said. Qwest also used the deals to quell potential dissent in its effort to enter the long-distance market in Minnesota, Klein ruled.
His decision is scheduled to be reviewed Monday by the Minnesota Public Utilities Commission, which could decide whether to levy a fine. Qwest planned to argue against the ruling.
The Colorado inquiry will allow local competitors and watchdogs to review details of the agreements and comment on them, PUC spokesman Terry Bote said. Competitors will then decide whether they want to opt into similar business terms with Qwest, Bote said.
The company’s prime long-distance rivals, AT&T and WorldCom, have raised the issue of secret agreements in their comments on Qwest’s application for long distance phone service in its 14-state region.
Qwest gave up its long-distance service in the region when it acquired local phone service provider U S West in 2000. Since then Qwest has been working to meet regulators’ requirements to open the market to local competition before it can resume long-distance service.
Qwest does not expect the Minnesota case to affect its re-entry into the long distance market, spokesman Bryce Hallowell said.