Cox to pay $2.2 million in Qwest settlement

Cox Communications has agreed to pay $2.2 million to Qwest Communications International for using Qwest lines to provide telephone service to apartments and other multiple housing units in Arizona without informing Qwest about it.

Although the agreement between the two largest Arizona phone companies was announced in early April, the amount of the settlement was not revealed until Friday during a hearing before an Arizona Corporation Commission administrative law judge.

But that may not be all that Cox will have pay for surreptitiously tapping into Qwest's lines. The commission staff is recommending that Cox also pay fines of up to $4 million to the state for allegedly violating the interconnection agreement between the companies.

In a written statement, Cox Arizona's vice president of community relations, Ivan Johnson, said the commission should approve the settlement, which was negotiated between the two companies, and not impose any additional fine.

"We believe that the settlement reached between Cox and Qwest promotes continuing, vigorous competition for Arizona's many apartment and condominium telephone customers," Johnson said. "And after 28 months of working with both Qwest and the ACC, we can see no benefit or justification for a fine on a dispute that the parties have now settled."

The issue stems from a complaint filed by Qwest with the utility regulatory commission more than two years ago that Cox technicians were connecting to Qwest wiring to provide telephone service to apartments and condos without telling Qwest about it or paying for the use of the equipment. Also Qwest accused Cox workers of damaging Qwest's equipment in the process and cutting phone service to Qwest customers in the complexes. Qwest said that endangered the public's health and safety.

In testimony before the commission, Cox representatives said they have spent about $1.4 million to repair the damage and made about 9,000 "corrective actions." The company also agreed to pay Qwest $500,000 for the use of Qwest lines in the future in addition to the $2.2 million in back payments for the previous use, said Qwest spokesman Jeff Mirasola.

Under an interconnection agreement between the two companies, Cox is allowed to tap into Qwest lines if it informs Qwest and pays for the connections. The practice is authorized in the federal Telecommunications Act of 1996 to encourage competition in the telephone industry.

Arizona Corporation Commissioner Kris Mayes said she supported disclosing the amount of the settlement, but didn't say if she supports the settlement itself. "Clearly the commission needs to discuss the amount and do it in a way that's open to the public," she said. "Now we can have a full discussion if it is an appropriate amount."