Qwest Communications International Inc. officials on Wednesday accused SBC Communications Inc. of impeding competition by creating a company "blacklist" and establishing restrictive network pricing plans.
Qwest executives outlined their accusations in a meeting with Federal Communications Commission officials and planned to provide written details in a letter to be filed on Thursday. Steve Davis, a senior vice president, declined to discuss specifics of the meeting.
Deputy Qwest General Counsel Robert Connelly claimed in a draft of the letter that SBC apparently wants to prevent competition after its merger with AT&T Corp. is completed. He asked the FCC to set merger conditions to ensure a competitive environment prevails.
"Qwest is concerned that these SBC actions are just the beginning of its actions to exploit the anticompetitive market power it is gaining through the merger," he wrote.
SBC officials were reviewing the letter late Wednesday. Company spokesman Joe Izbrand questioned the timing amid speculation that the FCC and Justice Department are close to approving the merger.
"Suddenly, at the 11th hour, Qwest decides that it wants to jump into the act, rehash claims that have previously been made and refuted," he said. "They're hoping to get some of the crumbs off the table in the event that there are any kind of conditions placed on the merger. It's simply a desperate attempt on their part."
Denver-based Qwest, the primary local phone service provider in 14 mostly Western states, has been a vocal opponent of pending telecommunications mergers, contending they will hamper competition. Earlier this year, MCI rejected Qwest's $9.85 billion acquisition bid in favor of an $8.5 billion deal from Verizon.
The FCC and the Justice Department are reviewing SBC's $16 billion acquisition of AT&T and the Verizon-MCI agreement.
In his letter, Connelly asked the FCC to investigate contracts between SBC and some smaller carriers that he said contained wording to restrict the carriers' abilities to merge with "blacklisted" companies.
He cited language in publicly released redacted contracts between SBC and Time Warner Telecom Holdings Inc., and SBC and WilTel Communications LLC. Representatives at WilTel and Time Warner Telecom declined comment.
Izbrand said the language is fairly common for businesses that want to specify with whom they are willing to do business and added that similar language is contained in a contract between Qwest and Sprint Wireless.
Davis said he believes there is a difference between a Qwest-Sprint wholesale agreement and SBC's merger with its largest competitor.
Connelly also contended SBC has imposed limits that would make it more difficult for Qwest and other competitors to lower network access costs or to receive discounted special access prices.
Izbrand said SBC has submitted evidence to the FCC that refutes the pricing claims.