Qwest

Last updated
Qwest Communications International Inc.
Company type Subsidiary
NYSE: Q
Industry Telecommunications
Predecessor US West
Founded1996;28 years ago (1996)
Founder Phillip Anschutz
DefunctAugust 1, 2011;13 years ago (2011-08-01)
FateMerged with CenturyLink
Headquarters 1801 California Street, ,
U.S.
Area served
International
Services Telephone
Internet
Television
RevenueDecrease2.svg $13.778 billion (2007)
Increase2.svg $1.730 billion (2007)
Increase2.svg $2.917 billion (2007)
Total assets Increase2.svg $22.532 billion (2007)
Total equity Increase2.svg $563 million (2007)
Number of employees
30,000 (2010)
Parent Lumen Technologies (2011–present)
Subsidiaries Qwest Corporation
Website www.qwest.com
Footnotes /references
[1]

Qwest Communications International, Inc. was a United States telecommunications carrier. Qwest provided local service in 14 western and midwestern U.S. states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Texas, Utah, Washington, and Wyoming.

Contents

On April 22, 2010, CenturyLink announced it would acquire Qwest in a stock transaction. [2] The merger closed on April 1, 2011. Qwest began doing business as CenturyLink in August 2011. [3]

Qwest provided voice, Internet backbone data services, and digital television in some areas. It operated in three segments: Wireline Services, Wireless Services, and Other Services. The Wireline Services segment provided local voice, long-distance voice, and data and Internet (DSL) services to consumers, businesses, and wholesale customers, as well as access services to wholesale customers. The Wireless Services segment was achieved by a partnership with Verizon Wireless. Qwest also partnered with DirecTV to provide digital television service to its customers. In Phoenix, Denver, Salt Lake City, Boise, and Omaha, Qwest offered Qwest Choice TV (later also known as Qwest Digital Television), an IPTV service over DSL. This service was retired in October 2008 (after being no longer available to new customers in May 2008), leaving DirecTV as the only TV service Qwest provided. Qwest Choice TV customers were moved to DirecTV. The Other Services segment primarily involved the sublease of real estate assets, such as space in office buildings, warehouses, and other properties.

Qwest Communications also provided long-distance services and broadband data, as well as voice and video communications globally. The company sold its products and services to small businesses, governmental entities, and public and private educational institutions through various channels, including direct-sales marketing, telemarketing, arrangements with third-party agents, company's Web site, and partnership relations. As of September 13, 2005, Qwest had 98 retail stores in 14 states. Qwest Communications was headquartered in Denver, Colorado at 1801 California Street, in the second tallest building in Denver at 53 stories. The majority of Qwest occupational or non-management employees were represented by two labor unions; the Communications Workers of America and in Montana, the International Brotherhood of Electrical Workers. Qwest also had software development centers in Bangalore and Noida (New Delhi), India called Qwest Software Services.

History

Founding

Founded in 1996 by Philip Anschutz, Qwest began in an unconventional way. Anschutz, who owned the Southern Pacific Transportation Company at the time, established the subsidiary Southern Pacific Telecommunications Company and began installing the first all-digital, fiber-optic infrastructure along his railroad lines and connecting them into central junctions in strategic locations to serve businesses with high-speed data and T1 services. In 1997, the Southern Pacific Transportation Company merged with Union Pacific, but the telecom assets were kept separate from the railroad merger with Union Pacific. The telecom company was renamed Qwest and became a publicly traded company in June 1997. [4]

Qwest Communications grew aggressively, acquiring internet service provider SuperNet in 1997, followed by the acquisition of LCI, a low cost long-distance carrier (located in Dublin, Ohio and McLean, Virginia) in 1998, and followed again by the acquisition of Icon CMT, a web hosting provider, also in 1998. This launched Qwest as not only a provider of high speed data to the niche market of corporate customers, but also a quick-growing residential and business long-distance customer base that it quickly merged into its data service.

US West acquisition

USWEST Corporate Logo, 1984-2000 US West logo.svg
USWEST Corporate Logo, 1984–2000

Qwest merged with "Baby Bell" US West on June 30, 2000 through an apparent hostile takeover. Philip Anschutz owned 17.5% of the resulting company. Unlike prior merger transactions between the Baby Bells, US West ceased to exist when it was immediately absorbed into Qwest with all subsidiaries of US West becoming directly owned by Qwest.

As a condition of the merger, Qwest was required to sell off its long-distance operations in the 14-state boundary in which it provided local telephone services. They were eventually sold to Touch America. In 2003, Qwest acquired Touch America from 360networks after Touch America filed for bankruptcy. The acquisition ended ongoing disputes between the two companies in which Touch America alleged Qwest continued to illegally sell long-distance services within the former US West region. [5]

Directory operations sale

In 2002, Qwest agreed to sell its directory operations, QwestDex, to private equity firms The Carlyle Group and Welsh, Carson, Anderson & Stowe for $7 billion. The sale allowed Qwest to generate cash to fend off a bankruptcy filing to which it may have had to resort due to significant amounts of debt it had incurred since the collapse of the dot-com bubble. [6] The resulting company was named Dex Media, when the sale was completed in 2004.

Alliances

Qwest Communications has partnered with other major communications companies during its history.

In Europe, Qwest partnered with the Dutch national telecom operator KPN to create the pan-European data communications and hosting company KPNQwest. KPNQwest was formed in November 1998 and went on to launch an initial public offering on the Nasdaq and Amsterdam stock Exchanges in November 1999. KPNQwest collapsed in bankruptcy in 2002.

In the US, Qwest partnered with AT&T and Verizon to form Movearoo.com. [7] Created on July 9, 2008, the website is a program designed to help customers in the process of moving find home service providers available in their area. [8]

Problems

Customer complaints and consumer issues

One of the historically significant mass complaints regarding Qwest involved allegations that the then-long-distance-only company switched local telephone service customers over to Qwest's long-distance service without their permission, an illegal practice known as slamming . In July 2000, Qwest paid a $1.5 million fine to the Federal Communications Commission to resolve slamming complaints. In April 2001, they paid a $350,000 fine to the Pennsylvania Bureau of Consumer Protection after the state cited them for deceptive advertising and slamming practices. [9] The company's settlements included a requirement that all of its sales employees sign a pledge stating that slamming was barred and a condition for dismissal from Qwest employment.

Accounting and insider trading irregularities

The company was also involved in accounting scandals, and was fined $250 million by the U.S. Securities and Exchange Commission (SEC), to be split into two $125 million payments due to the poor state of Qwest's current financial health. Among the transactions in question were a series of deals from 1999 to 2001 with Enron's broadband division which may have helped Enron conceal losses. In 2005, former Chairman and chief executive officer (CEO) Joseph Nacchio, former President and chief operating officer (COO) Afshin Mohebbi and seven other former Qwest employees were accused of fraud in a civil lawsuit filed by the SEC. Separately, Nacchio was convicted of 19 counts of insider trading in Qwest stock on April 19, 2007. [10] On March 31, 2011, US Federal Judge Marcia Krieger issued a summary judgement rejecting all SEC's claims against Afshin Mohebbi and ruling in his favor.

Refusal of NSA surveillance requests

In May 2006, USA Today reported that millions of telephone calling records had been handed over to the United States National Security Agency by AT&T Corp., Verizon, and BellSouth since September 11, 2001. This data has been used to create a database of all international and domestic calls. Qwest was allegedly the lone holdout, despite threats from the NSA that their refusal to cooperate may jeopardize future government contracts, [11] a decision which has earned them praise from those who oppose the NSA program. [12]

In the case of ACLU v. NSA , U.S. District Judge Anna Diggs Taylor on August 17, 2006 ruled that the government's domestic eavesdropping program is unconstitutional and ordered it ended immediately. [13] The Bush Administration filed an appeal in the case, and Judge Taylor's decision was overturned by the appeals court on the basis of a lack of standing.

Former Qwest CEO Joseph Nacchio alleged in appeal documents that the NSA requested that Qwest participate in its wiretapping program more than six months before September 11, 2001. Nacchio recalled the meeting as occurring on February 27, 2001. Nacchio further claimed that the NSA cancelled a lucrative contract with Qwest as a result of Qwest's refusal to participate in the wiretapping program. [14] On April 14, 2009, Nacchio surrendered to a federal prison camp in Schuylkill, Pennsylvania, to begin serving a six-year sentence for an insider trading conviction. The United States Supreme Court denied bail pending appeal the same day. [15] [16]

A social media experiment and website covering the Qwest holdout, "Thank you Qwest dot Org" [17] built by Netherlands-based webmaster Richard Kastelein and American expatriate journalist Chris Floyd, was covered by the CNN Situation Room , [18] USA Today, [19] New York Times , [20] [21] International Herald Tribune , [22] Denver Post , [23] [24] News.com, [25] and the Salt Lake Tribune . [26]

On April 22, 2010, CenturyLink announced it would acquire Qwest in a transaction of 0.1664 shares of CenturyLink common stock for each share of Qwest common stock. CenturyLink shareholders would hold a 50.5% share of ownership in the combined company, while Qwest shareholders would own the remaining 49.5%. The valuation of CenturyLink's purchase as of April 21, 2010, was $22.4 billion, including the assumption of $11.8 billion of outstanding debt held by Qwest as of December 31, 2009. [27] [28] Qwest started to do business as CenturyLink from August 8, 2011.

Corporate structure

Qwest Communications International, Inc. was the holding company. It was the parent company of many more entities, but those listed below were the main operating units:

Defunct entities

See also

Notes

  1. "Qwest Communications International, Inc". Google Finance. Archived from the original on August 30, 2006. Retrieved 2008-08-07.
  2. "CenturyLink and Qwest Agree to Merge". News.qwest.com. Retrieved 2012-01-06.
  3. "CenturyLink completes $12.2 billion acquisition of Qwest". Komonews.com. 2011-04-01. Retrieved 2012-01-06.
  4. Schiesel, Seth (June 22, 1997). "Left Out of Succession Fight, A Rising Star Defects to Upstart". The New York Times. Retrieved November 3, 2024.
  5. Jim Duffy (14 November 2003). "Qwest acquires Touch America assets". Network World.
  6. "Qwest to Sell Yellow Pages For $7 Billion". The New York Times. 20 August 2002.
  7. "Find TV, Internet, and Phone Service - Movearoo".
  8. O'Shea, Dan (July 9, 2012). "Telcos move in unison with Movearoo.com". fiercetelecom.com.
  9. "Qwest to pay fine for slamming". Denver Business Journal . 2001-04-27. Retrieved 2008-08-07.
  10. Frosch, Dan (2007-04-20). "Ex-Chief at Qwest Found Guilty of Insider Trading". New York Times . Retrieved 2008-08-07.
  11. Cauley, Leslie (2006-05-11). "NSA has massive database of Americans' phone calls". USA Today . Retrieved 2008-08-07.
  12. Smith, Jeff (2006-05-12). "Qwest defies NSA". Rocky Mountain News . Archived from the original on 2008-06-18. Retrieved 2008-08-07.
  13. Mears, Bill; Andrea Koppel (2006-08-17). "NSA eavesdropping program ruled unconstitutional". CNN. Retrieved 2008-08-07.
  14. "Nacchio says feds punished Qwest: report". MarketWatch. 2007-10-13.
  15. Vuong, Andy. "?". Denver Post. Archived from the original on August 5, 2009.
  16. "Nacchio reports to prison; former employees pleased". 9news.com.[ permanent dead link ]
  17. "Thank you Qwest dot Org". Thankyouqwest.org. Richard Kastelein. n.d. Archived from the original on 2006-06-15. Retrieved 2022-08-18.{{cite web}}: CS1 maint: unfit URL (link)
  18. Blitzer, Wolf (2006-05-12). "Surrounding NSA Tracking of Phone Calls". The Situation Room. Retrieved 2008-08-07.
  19. Armour, Stephanie (2005-05-15). "Phone companies' customers offer their take on assisting NSA". USA Today. Retrieved 2008-10-20.
  20. Zellor, Tom (2005-05-15). "Qwest Goes From the Goat to the Hero". New York Times . Retrieved 2008-10-20.
  21. Belson, Ken (2005-05-15). "Qwest's Ex-Chief Is Suddenly Cast as Defender of Privacy". New York Times . Retrieved 2008-10-20.
  22. Zellor, Tom (2005-05-15). "Qwest achieves some customer respect". International Herald Tribune . Archived from the original on 2006-12-12. Retrieved 2008-10-20.
  23. Potter, Beth (2005-05-15). "Qwest Stand Wins Praise". Denver Post . Retrieved 2008-10-20.
  24. Potter, Beth (2005-05-15). "Qwest Finds Favor over NSA Flap". Denver Post . Retrieved 2008-10-20.
  25. Zellor, Tom (2005-05-15). "Qwest's ex-chief suddenly cast as privacy defender". News.com . Retrieved 2008-10-20.
  26. Oberbeck, Steven (2005-05-15). "Phone Snoop Creates Uproar". Salt Lake Tribune . Retrieved 2008-10-20.
  27. "CenturyLink and Qwest Agree to Merge" (Press release). Monroe, LA & Denver, CO: Qwest Communications International, Inc & CenturyLink. 2010-04-22. Retrieved 2010-04-22.
  28. "CenturyLink to buy Qwest for $10.6 billion in stock". Washington, DC: MarketWatch. 2010-04-22. Retrieved 2010-04-22.

Related Research Articles

<span class="mw-page-title-main">GTE</span> Defunct American telephone company

GTE Corporation, formerly General Telephone & Electronics Corporation (1955–1982), was the largest independent telephone company in the United States during the days of the Bell System. The company operated from 1926, with roots tracing further back than that, until 2000, when it was acquired by Bell Atlantic; with the combined companies formed under the currently operating Verizon banner.

<span class="mw-page-title-main">Regional Bell Operating Company</span> U.S. regional telephone company created by 1984 break of AT&T

A Regional Bell Operating Company (RBOC) was a corporate entity created as result of the antitrust lawsuit by the U.S. Department of Justice against the American Telephone and Telegraph Company (AT&T) in 1974 and settled in the Modification of Final Judgment on January 8, 1982.

<span class="mw-page-title-main">Ameritech</span> Subsidiary of AT&T

AT&T Teleholdings, Inc., formerly known as Ameritech Corporation, was an American telecommunications company that arose out of the 1984 AT&T divestiture. Ameritech was one of the seven Regional Bell Operating Companies created following the breakup of the Bell System. Ameritech was acquired in 1999 by SBC Communications, which subsequently acquired AT&T Corporation in 2006, becoming the present-day AT&T.

<span class="mw-page-title-main">BellSouth</span> American telecommunications company

BellSouth, LLC was an American telecommunications holding company based in Atlanta, Georgia. BellSouth was one of the seven original Regional Bell Operating Companies after the U.S. Department of Justice forced the American Telephone & Telegraph Company to divest itself of its regional telephone companies on January 1, 1984.

US West, Inc. was one of seven Regional Bell Operating Companies, created in 1983 under the Modification of Final Judgement, a case related to the antitrust breakup of AT&T. US West provided local telephone and intraLATA long-distance services, data transmission services, cable television services, wireless communications services and related telecommunications products to defined areas in Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. US West was a public company traded on the New York Stock Exchange under the ticker symbol "USW" with headquarters at 1801 California Street in Denver, Colorado.

<span class="mw-page-title-main">Tele-Communications Inc.</span> Defunct American cable television provider

Tele-Communications, Inc. (TCI) was a cable television provider in the United States, and for most of its history was controlled by Bob Magness and John Malone.

Rogers Telecom Inc. is a subsidiary of Rogers Communications. It is a Canadian company based in Toronto that focuses on integrated communications as a provider of data, e-business and voice services to business and households. It used to be known as Sprint Canada Inc., pursuant to a 1993 branding agreement between parent Call-Net Enterprises Inc. with what is now Sprint Nextel Corporation.

<span class="mw-page-title-main">Breakup of the Bell System</span> 1982 U.S. government action to end AT&T Corps monopoly over telephone services

The monopoly position of the Bell System in the U.S. was ended on January 8, 1982. AT&T Corporation proposed by in a consent decree to relinquish control of the Bell Operating Companies, which had provided local telephone service in the United States. AT&T would continue to be a provider of long-distance service, while the now-independent Regional Bell Operating Companies (RBOCs), nicknamed the "Baby Bells", would provide local service, and would no longer be directly supplied with equipment from AT&T subsidiary Western Electric.

Joseph P. Nacchio is an American executive who was chairman of the board and chief executive officer of Qwest Communications International from 1997 to 2002. Nacchio was convicted of insider trading during his time heading Qwest. He claimed in court, with documentation, that his was the only company to demand legal authority for surreptitious mass surveillance demanded by the NSA which began prior to the 11 September 2001 attacks.

<span class="mw-page-title-main">Sprint Corporation</span> Former American telecommunications company

Sprint Corporation was an American telecommunications company. Before being acquired by T-Mobile US on April 1, 2020, it was the fourth-largest mobile network operator in the United States, serving 54.3 million customers as of June 30, 2019. The company also offered wireless voice, messaging, and broadband services through its various subsidiaries under the Boost Mobile and Open Mobile brands and wholesale access to its wireless networks to mobile virtual network operators.

The Pacific Northwest Bell Telephone Company is a telecommunications company that provides local telecommunications services in Oregon, Washington, and northern Idaho. Pacific Northwest Bell Telephone Company was formed on July 1, 1961, when it was spun off from the Pacific Telephone and Telegraph Company. It was the local exchange carrier for the Bell System, the AT&T Corporation-controlled network of companies. On January 1, 1984, Pacific Northwest Bell was split from AT&T as ordered in the settlement of United States v. AT&T and became a subsidiary of the newly formed Regional Bell Operating Company US West. Pacific Northwest Bell became dormant when US West consolidated its three main operating subsidiaries, forming US West Communications, Inc. on January 1, 1991. US West merged with Qwest Communications International Inc. in 2000, and the US West brand was replaced by the Qwest brand. Qwest Communications merged with Louisiana-based CenturyLink in 2011, and the Qwest brand was replaced by the CenturyLink brand. It now does business with the Lumen Technologies brand as of 2020.

<span class="mw-page-title-main">Embarq</span> American technology company

Embarq Corporation was the largest independent local exchange carrier in the United States, serving customers in 18 states and providing local, long-distance, high-speed data and wireless services to residential and business customers. It had been formerly the local telephone division (LTD) of Sprint Nextel until 2006, when it was spun off as an independent company. Embarq produced more than $6 billion in revenues annually, and had approximately 18,000 employees. It was based in Overland Park, Kansas.

Qwest Corporation is a Regional Bell Operating Company owned by Lumen Technologies. It was originally named named Mountain States Telephone and Telegraph Company, later becoming known as Mountain Bell, then US West Communications, Inc. from 1991 to 2000. It includes the former operations of Malheur Bell, Northwestern Bell and Pacific Northwest Bell as well.

Afshin Mohebbi is an Iranian-born United States businessman, best known as the former president and Chief Operating Officer of Qwest Communications International.

Malheur Home Telephone Company, commonly known as Malheur Bell, was a rural telephone company operating in Oregon. It was a wholly owned subsidiary of Qwest Corporation, the Bell Operating Company of Qwest Communications International.

Comcast MO Group, Inc. was created by US WEST Inc., one of the original Baby Bells Regional Bell Operating Companies, acquisition of Boston-based Continental Cable and combined with its previously acquired Atlanta-based Wometco/GTC. Wometco/GTC adopted the MediaOne name a year earlier. Media One Group was acquired in 2000 by AT&T Broadband, which was subsequently acquired by Comcast in 2002.

<span class="mw-page-title-main">AT&T</span> American multinational telecommunications holding company

AT&T Inc., an abbreviation for its former name, the American Telephone and Telegraph Company, is an American multinational telecommunications holding company headquartered at Whitacre Tower in Downtown Dallas, Texas. It is the world's third largest telecommunications company by revenue and the third largest wireless carrier in the United States behind Verizon and T-Mobile. As of 2023, AT&T was ranked 13th on the Fortune 500 rankings of the largest United States corporations, with revenues of $122.4 billion.

<span class="mw-page-title-main">Bell System</span> American telephone service monopoly (1877-1982)

The Bell System was a system of telecommunication companies, led by the Bell Telephone Company and later by the American Telephone and Telegraph Company (AT&T), that dominated the telephone services industry in North America for over 100 years from its creation in 1877 until its antitrust breakup in 1983. The system of companies was often colloquially called Ma Bell, as it held a vertical monopoly over telecommunication products and services in most areas of the United States and Canada. At the time of the breakup of the Bell System in the early 1980s, it had assets of $150 billion and employed over one million people.

Lumen Technologies, Inc. is an American telecommunications company headquartered in Monroe, Louisiana, which offers communications, network services, security, cloud solutions, voice and managed services through its fiber optic and copper networks, as well as its data centers and cloud computing services. The company has been included in the S&P 600 index since being removed from the S&P 500 in March 2023.

The history of AT&T dates back to the invention of the telephone. The Bell Telephone Company was established in 1877 by Alexander Graham Bell, who obtained the first US patent for the telephone, and his father-in-law, Gardiner Greene Hubbard. Bell and Hubbard also established American Telephone and Telegraph Company in 1885, which acquired the Bell Telephone Company and became the primary telephone company in the United States. This company maintained an effective monopoly on local telephone service in the United States until anti-trust regulators agreed to allow AT&T to retain Western Electric and enter general trades computer manufacture and sales in return for its offer to split the Bell System by divesting itself of ownership of the Bell Operating Companies in 1982.

References