US WEST, AT&T Sign Market Division Deal

SEATTLE, Washington -- AT&T Corp. withdrew its opposition to the $85 billion merger between US WEST Inc. and Qwest Communications International Inc. in exchange for the companies' silence in the debate over allowing competitors access to AT&T's cable television holdings, according to a once-secret agreement.

In the agreement, signed in April and released Friday, AT&T agrees to drop its opposition in each of the 14 U.S. states that had jurisdiction over the merger. In exchange, US WEST and Qwest would refrain from supporting "open access'' activities in the same states.

The Washington Utilities and Transportation Commission made the document public after the companies, which had originally petitioned the courts to halt public disclosure, relented.

"The commission decided that this agreement didn't meet the standards for confidentiality," said Glenn Blackmon, WUTC assistant director for telecommunications. "It belongs in the public record."

AT&T's tacit agreement to the merger of regional "Baby Bell" US WEST and No. 4 long-distance carrier Qwest removed a vocal opponent from the often arcane regulatory process. The two companies agreed to merge in June 1999 and required approval from the U.S. government and every state US WEST serves.

Qwest announced late Friday that it had completed its merger with US WEST Inc., creating a company that will bear the Qwest name.

The two Denver-based companies finalized the merger 49 weeks after it was announced and four days after it won final approval from federal regulators.

Qwest and US West will now have their hands tied when it comes to arguing for access to AT&T's extensive cable holdings, seen as one of the best channels for high-speed Internet access and telephone communications. The Federal Communications Commission and regulators in various U.S. states are looking at requiring AT&T to provide access to its cable network to competing Internet and communications services.