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Qwest to forgo link-up fee for some Web phone calls

By Scott Lanman
Bloomberg News

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Qwest, the fourth-largest U.S. local-telephone company, said in a statement that it is urging the Federal Communications Commission (FCC) to adopt similar rules nationally. Denver-based Qwest is using the policy in its local-service territory, which covers 14 Western states, including Washington.

Qwest is the only one of the four regional-phone carriers known as Baby Bells to adopt such a stance. The move comes as Internet-phone startups such as Vonage increasingly take customers from local carriers, who are also starting to offer similar services, as Qwest has done.

The move won't have a big financial effect on the company because less than 1 percent of Qwest's call-connection fees come from Internet-phone services, Qwest Senior Vice President Steven Davis said. The company collects several hundred million dollars annually in total fees, said Davis, who couldn't immediately provide a precise number.

"We're trying to set this policy here at the beginning," Davis said in an interview.

The policy would speed the spread of so-called Voice-over-Internet-Protocol, or VoIP, services, and would benefit customers, the industry and Qwest, the company said.

The policy doesn't apply to calls that travel between two phones on the circuit-switched network and pass through the Internet in the middle, Qwest said. The FCC ruled last week that regular fees apply to those calls.

Officials at Verizon, SBC Communications and BellSouth, the three biggest carriers, said they should be compensated when other carriers use their networks to complete calls.

"If it touches our network, then access charges should apply," BellSouth spokesman Bill McCloskey said.

SBC spokesman Dave Pacholczyk said the underlying compensation system should be altered. Verizon spokeswoman Maureen Flanagan said "nothing's changed" about the company's position that access fees must be paid.

Vonage, which has 145,000 customers and may save on connection fees, considers Qwest's move a "bold policy statement," Vonage spokeswoman Brooke Schulz said.

Schulz was unable to provide figures on how much closely held Vonage spends on access fees, which the company pays indirectly through other phone carriers such as Global Crossing.

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