Summary
1. If an RBOC is a source of the article, it could be another one of those trial balloons. 2. The receptiveness by the new federal regulatory community to competitors buying a long-haul network, especially AT&T and Verizon, is somewhat unknown. 3. However, the FCC and the Congress may have a problem with another RBOC buying the network – only to get the subscriber base – and then shut it down.
Analysis
It would definitely be the “corporate and government clients,” that would be the major attraction in purchasing the Qwest long-haul network. But even though there are still way too many national carriers, the knee-jerk response of the Washington politicians would be to exclaim, “anti-competitive behavior.” Level 3 would probably be able to get away with shutting down the Qwest long-haul network. However, it would be averse to taking on all of that debt.
The other aspect for other interexchange service providers would be analogous to a manufacturer’s reluctance to purchase another vendor just to expand the number of customers. There would often have to be some technological or cost advantage in picking up additional infrastructure. There really is nothing that special about Qwest’s network.
One reason not mentioned in the original piece for Qwest selling off the long-haul assets is the difficulty in competing for wholesale business. With Level 3 having the lowest cost network in the business, it has a major advantage over Qwest in getting contracts from other carriers.
