In a routine filing with the Securities and Exchange Commission, BellSouth Corp. suggested it might be interested in increasing its ownership stake in broadband company Qwest Communications International Inc.
The filing was required following the close of BellSouth’s purchase of a 10-percent interest in Qwest, announced in April.
According to the filing, BellSouth has considered and is exploring alternatives relating to the company’s interest in Qwest, including transactions that could result in BellSouth acquiring a controlling position in or combining with Qwest. BellSouth, however, is precluded from providing long-distance service or owning more than 10 percent of a long-distance company until it meets certain regulatory requirements that demonstrate its local markets are open to competition. Once BellSouth is allowed into the long-distance market, it can increase its stake in Qwest to 20 percent.
Jeff Battcher, a spokesman for BellSouth, said the company believes it will be allowed to begin offering long-distance service in Georgia by the end of this year or early next year, marking a significant milestone in the company’s efforts to offer long-distance services to its customers. Battcher said BellSouth has opened its markets to local competition, but competitive local exchange carriers tend to be targeting business customers only, leaving residential customers unserved by the CLECs and creating the perception that the company has not completely opened its markets.
Meanwhile, Qwest has been rumored to be mulling a possible counteroffer to Global Crossing Ltd.’s $37 billion bid to buy U S West Inc.
