Denver US West's 25 million customers can expect to receive better basic telephone service thanks to the Baby Bell's merger with upstart Qwest Communications, a top executive said.
Qwest Chief Executive Joseph Nacchio admitted to state regulators Monday the company he's teaming up with in a $48 billion deal faces ''service issues.''
''I know there are service issues,'' said Nacchio, who will be the CEO of the combined company, also to be named Qwest. ''I know there also are issues about local competition. It's our belief that Qwest's merger with US West will improve both these issues.''
The new Qwest, with a bolstered customer base and its nationwide fiber-optic network, hopes to be able to compete with AT&T and others who want to provide telephone, Internet and cable television service.
Nacchio said Qwest will use some of the $5.3 billion that will be gained from the near elimination of US West's annual shareholder dividend to bolster traditional phone service.
The combination will also promote a ''new competitive world'' in the 14 states where U S West dominates the local phone business, leading to improved basic service, said Nacchio.
US West has come under heavy criticism from regulators in Colorado, Washington, Oregon and New Mexico for delayed phone hookups and other service problems. Its activities face close scrutiny in other states as well.
The merger has raised questions about the future of basic phone service across US West's vast region.
Nacchio said he plans to use Qwest's entrepreneurial experience to ensure that satisfied customers stay with the new company.
''We will not be bound by traditional limitations of the local telephone company model, which discouraged competition and did not reward growth,'' he said.
''We know from experience in the Internet (business) that the new, competitive world that we advocate for the US West territory will require a high level of service quality or we will lose customers to our competition.''