US West

US West

U S WEST, Inc. was a Regional Bell Operating Company, one of seven "Baby Bells" that were spawned by the antitrust breakup of AT&T in 1983. It provided telephone and data service to several Pacific Northwest and mountain states. It was acquired by Qwest Communications International on June 30, 2000 in what some economists have charged as a hostile takeover. Prior to the publicly announced "merger," U S WEST was traded publicly under ticker symbol "USW." The company headquarters was located at 1801 California Street in Denver, Colorado, the present-day company headquarters of Qwest.

Until 1990, U S WEST was a holding company with three subsidiary Regional Bell operators: Mountain States Telephone & Telegraph (or Mountain Bell; based in Denver, Colorado), Northwestern Bell (based in Omaha, Nebraska) and Pacific Northwest Bell (based in Seattle, Washington). On January 1, 1991, U S WEST consolidated Northwestern Bell and Pacific Northwest Bell operations into those of Mountain Bell, renaming it U S WEST Communications, Inc., becoming the first Baby Bell to consolidate operations of its Bell Operating Companies (BellSouth with its BellSouth Telecommunications subsidiary being the other).

U S WEST served most parts of Arizona, Colorado, Idaho, Montana, New Mexico, Utah, and Wyoming (formerly Mountain Bell area); Iowa, Minnesota, Nebraska, North Dakota and South Dakota (formerly Northwestern Bell area); and Idaho, Oregon and Washington (formerly Pacific Northwest Bell area).

U S WEST's Accomplishments

U S WEST Communications became a pioneer in the introduction and rapid system-wide implementation of telephone technologies designed by Bellcore (now Telcordia Technologies) in the 1980s and 1990s. Their lead in this push became one that many other Regional Bell Operating Companies had to scramble to keep up with. Much of U S WEST's success in this endeavor was for multiple reasons; including their then-innovative use of "test-markets" for staggered roll-outs of new calling features in middle-sized cities such as Boise, Idaho; Minneapolis, Minnesota; and Phoenix, Arizona before releasing them on a wider scale. (They were the first communications provider to use this strategy now called beta-testing). Their geographic presence featured telephone switching equipment that had been constructed fairly recent to the time frame, thereby requiring fewer upgrades. Their service area was also experiencing population growth at a tremendous rate, tripling their subscriber-base in a short time and increasing revenues.

U S WEST Communications was the first local telephone company to offer Caller ID service in 1991; nearly four years before any other local telco could do so. They were the first telco to upgrade their PSTN to electronic switching before 1990 and they were the first to offer residential and business ISDN and later, DSL services to their customers by 1997. US West was also briefly in the cable business with its purchase of Continental Cablevision in 1996, creating MediaOne (which was later spun off).

As a result of its rapid "bring-to-market" abilities and continued success in the advances in technology, the company quickly adopted a new slogan— "Life's better here."

Criticisms of U S WEST

Despite the rapid growth and waves of technology, U S WEST began to capture the ire of many customers and even some of the states in which they operated.

U S WEST, in several complaints that landed the company in court, was accused of failing to meet service needs within a reasonable time frame and of practicing predatory billing and collection methods. While the company often claimed that subscriber demands were often greater than their ability to fulfill orders, many critics pointed to high profit margins, spending on bring-to-market technology and lackluster investment in customer support. Critics also accused the company of monopoly-like practices. The charge of monopoly practices was considered quite serious, since the US Courts had specifically broken up the AT&T/Bell operating companies in order to eliminate or minimize such monopolistic effects.

The company was fined multiple times by the State of Oregon for these practices during the 1990s. U S WEST was also, at several times, involved in smaller litigation with other states within its service area for similar complaints from customers.

In business-to-business matters, U S WEST also had a rather sullied reputation shortly before its demise. Namely, Qwest, MCI and smaller CLECs who had recently been allowed to offer local service within U S WEST's service area (as a result of the Telecommunications Act of 1996) complained to the FCC that U S WEST was uncooperative in releasing their formerly owned lines to these new companies. These types of complaints landed U S WEST in court yet again and offered the complex question of whether or not the government could legally offer the sale of owned property to other companies in the event of deregulation.

U S WESTs stalled and problematic cooperation with other CLECs was long claimed by telecom experts at the time to be the reason that Qwest "merged" with US West.

The "merger"

Reports by The Denver Post and the Rocky Mountain News in 1996 revealed that CLECs lodged complaints with the FCC against U S WEST, including multiple complaints from Qwest Communications, Inc. The complaints alleged U S WEST refused to cooperate with provisions of the Telecommunications Act of 1996. Specifically, U S WEST either neglected or seriously delayed release of "bundled loops" and had, through those actions, made it extremely difficult for companies to provide local telephone service to its customers; Qwest already provided long-distance service to its customers, but needed local service.

Other companies began following suit, and charged U S WEST with monopoly-like or anti-trust type behavior. Courts were slow to do much about this because at the time, the full "letter of the law" of the 1996 Act had no precedence.

During the winter of 1999-2000, U S WEST announced publicly that it had received an unsolicited offer by Qwest Communications to buy U S WEST. At the time, U S WEST had been attempting to merge with Global Crossing, Inc and for months this deal had been stalled through the SEC and was earning both companies a lot of negative press.

At the time, U S WEST publicly refused this request and derided it in the local press. Qwest, unable to gain U S WEST's consent in a merger, purchased so much U S WEST stock that they then were able to perform a hostile takeover of the Board of Directors; this was announced in March 2000.

On June 30, 2000, the company was "merged" by order of the new board.

U S WEST CEO Solomon Trujillo resigned officially. But popular reports and rumours circulated that he had a very caustic relationship with Joseph Nacchio (who had been appointed the new CEO of the new Qwest) and that Mr. Nacchio allegedly had Mr. Trujillo escorted out of the building in a rather unprofessional public spectacle. Trujillo then continued to his current position, CEO of the Australian telecommunications provider Telstra.

After the merger, the combined company was renamed Qwest Communications International, Inc., with the Bell Operating Company being renamed Qwest Corporation.

Qwest has continually sought to be disassociated with U S WEST's poor customer service record and business reputation by advertising and sloganizing their dedication to customer service since 2002. For additional notes on this please see the Qwest article.

See also

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