Qwest

Qwest was an American telecommunications carrier that operated primarily in the western and Midwestern United States before being absorbed into CenturyLink. The company was established in 1996 by Philip Anschutz through Southern Pacific Telecommunications Company, a communications subsidiary connected to the Southern Pacific Transportation Company. Its early strategy used railroad rights-of-way to build an all-digital fiber-optic network and sell high-capacity data and T1 connectivity to business customers. This infrastructure-oriented origin gave Qwest a position distinct from traditional local telephone companies and helped it expand rapidly during the telecommunications and internet boom of the late 1990s. The company became Qwest Communications and went public in 1997. It expanded through acquisitions, including internet service provider SuperNet, long-distance carrier LCI, web-hosting provider Icon CMT, and European data and hosting company EUnet International. These transactions broadened Qwest from a niche fiber and enterprise-data operator into a carrier serving residential, business, wholesale, and international customers. Its activities included local telephone service, long-distance calling, DSL internet access, internet backbone and long-haul data services, wholesale access, and communications services for government and educational institutions. Qwest's defining corporate event was its 2000 combination with US West, one of the former regional Bell operating companies. The transaction gave Qwest a large incumbent local-exchange footprint covering fourteen states and substantially increased its consumer and business telephone operations. Following the merger, Qwest Corporation became the principal local operating entity in the former US West territory. Regulatory conditions required the divestiture of Qwest's long-distance operations within that local-service region; those assets were eventually associated with Touch America, which Qwest later acquired after 360networks' bankruptcy. The enlarged company also experimented with adjacent services and partnerships. It offered DSL-based IPTV in selected cities under the Qwest Choice TV and later Qwest Digital Television names, but retired that service in 2008 and moved customers to DirecTV. Qwest maintained a wireless relationship with Verizon Wireless and developed international activities through partnerships such as KPNQwest, a pan-European data and hosting venture that later failed in bankruptcy. Its business was organized into wireline, wireless, and other-services segments, with the last category including activities such as real-estate subleasing. Qwest's history was also marked by regulatory and governance problems. It faced complaints alleging unauthorized switching of customers to its long-distance service, known as slamming, and paid government settlements related to those practices. The company became involved in accounting and disclosure controversies concerning transactions with Enron's broadband division and other arrangements. The Securities and Exchange Commission pursued civil claims against former executives and employees, while former chief executive Joseph Nacchio was separately convicted of insider trading. These events damaged Qwest's reputation and reflected the financial and governance pressures affecting the telecommunications sector after the dot-com downturn. In 2002, Qwest agreed to sell its directory business, QwestDex, to private-equity firms. The completed transaction produced Dex Media and helped Qwest raise cash while carrying significant debt. The company continued operating as a major regional carrier, but its independence became increasingly difficult to sustain. In 2010, CenturyLink announced an all-stock acquisition of Qwest. The transaction closed on April 1, 2011, and Qwest began operating under the CenturyLink name in August 2011. The Qwest brand therefore survives mainly as a historical identity associated with the constru…

Qwest originated in the mid-1990s when Philip Anschutz established Southern Pacific Telecommunications Company in connection with the Southern Pacific Transportation Company. Rather than beginning as a conventional local telephone operator, the venture focused on deploying digital fiber-optic infrastructure along railroad routes and connecting the lines to strategically located network junctions. The system was designed to support high-speed business data and T1 services. When Southern Pacific Transportation merged with Union Pacific in 1997, its telecommunications assets remained separate. The company was renamed Qwest and became publicly traded that year. Qwest pursued an acquisition-led expansion during the telecommunications boom. It bought SuperNet in 1997, adding internet-service capabilities, and acquired LCI in 1998 to strengthen its low-cost long-distance business. It also acquired Icon CMT, a web-hosting provider, and EUnet International, a European data and hosting company. These deals transformed Qwest from a fiber-based enterprise network venture into a broader carrier with residential, business, wholesale, and international activities. The company supplied voice, broadband data, internet backbone, hosting, and related communications services. The most important turning point came in 2000, when Qwest merged with US West in a transaction described as a hostile takeover. US West was absorbed rather than retained as a separate corporate brand, giving Qwest local telephone operations in fourteen states: Arizona, Colorado, Idaho, Iowa, Minnesota, Montana, Nebraska, New Mexico, North Dakota, Oregon, South Dakota, Utah, Washington, and Wyoming. The enlarged company operated Qwest Corporation as its incumbent local-exchange carrier and supplied local voice, long-distance voice, DSL, wholesale access, and enterprise data services. As a condition of the merger, Qwest had to divest long-distance operations within the US West service territory. Those operations became associated with Touch America, which Qwest later acquired after the collapse of 360networks and Touch America's bankruptcy. Qwest diversified beyond basic telephony. Its wireline segment served consumers, businesses, government customers, schools, and wholesale carriers. Its wireless activities were conducted through a relationship with Verizon Wireless. It also partnered with DirecTV and, in selected cities including Phoenix, Denver, Salt Lake City, Boise, and Omaha, offered a DSL-delivered IPTV service known first as Qwest Choice TV and later as Qwest Digital Television. The IPTV product was withdrawn from new sales in 2008 and fully retired that October, with customers moved to DirecTV. Qwest's other-services activities included the subleasing of office, warehouse, and other real-estate assets. The company also maintained software-development centers in India. Qwest's expansion left it with substantial debt and exposure to the collapse of the dot-com-era telecommunications market. In 2002, it agreed to sell QwestDex, its directory operation, to private-equity firms. The transaction was completed in 2004 and resulted in Dex Media. Qwest also participated in international and domestic partnerships. KPNQwest, formed with Dutch operator KPN, built a pan-European data and hosting business, launched public offerings, and ultimately entered bankruptcy in 2002. In the United States, Qwest joined AT&T and Verizon in the Movearoo.com service, launched in 2008 to help people identify residential-service providers when moving. The company encountered significant consumer, regulatory, and governance controversies. Authorities investigated allegations that Qwest representatives changed customers' long-distance providers without permission, a practice known as slamming. Qwest paid federal and state penalties and required sales personnel to acknowledge that the practice was prohibited. The company was also subject to SEC action involving accounting and disclosure matters. Transactions with Enron's broadband unit were among the arrangements examined, and former executives faced civil claims. Former chief executive Joseph Nacchio was later convicted of insider trading. A federal court subsequently rejected the SEC's claims against former president and chief operating officer Afshin Mohebbi. In 2006, Qwest became prominent in a separate national-security controversy. Public reports said that AT&T, Verizon, and BellSouth had supplied customer calling records to the National Security Agency, while Qwest had declined a request to participate. Former CEO Nacchio later alleged that the NSA had approached Qwest before the September 11 attacks and that the company's refusal affected government business. The surveillance litigation produced conflicting procedural outcomes, including a district-court ruling that was later overturned on appeal for lack of standing. Qwest remained a major regional carrier but ultimately became part of the industry's consolidation. CenturyLink announced its acquisition of Qwest in April 2010. The merger closed on April 1, 2011, and Qwest began doing business as CenturyLink in August 2011. Qwest Communications International and its operating entities were consequently integrated into the CenturyLink organization, ending the independent Qwest brand as a principal telecommunications company.

1. 2011Qwest is absorbed into CenturyLink

   The merger closed in April, and Qwest operations began using the CenturyLink name in August.

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2. 2010CenturyLink announces Qwest acquisition

   CenturyLink announced an all-stock acquisition of Qwest.

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3. 2008Qwest Choice TV is retired

   Qwest withdrew its DSL-based IPTV service and shifted television customers to DirecTV.

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4. 2004QwestDex transaction is completed

   The directory business sale was completed and the successor company operated as Dex Media.

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5. 2002QwestDex sale is agreed

   Qwest agreed to sell its directory operations to private-equity buyers; the resulting business became Dex Media.

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6. 2000US West merger closes

   Qwest absorbed US West and obtained a fourteen-state incumbent local telephone footprint.

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7. 1998LCI, Icon CMT, and EUnet acquisitions

   Qwest added long-distance, web-hosting, and European data and hosting capabilities through multiple acquisitions.

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8. 1997The company becomes Qwest and goes public

   After the Union Pacific merger, the telecommunications assets remained separate, were renamed Qwest, and became publicly traded.

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9. 1997SuperNet acquisition

   Qwest acquired internet service provider SuperNet as part of its expansion into internet connectivity.

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10. 1996Southern Pacific Telecommunications is established

    Philip Anschutz established the telecommunications venture that developed the fiber network later associated with Qwest.

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A regional American telecommunications carrier built around fiber infrastructure, combining incumbent local telephone operations with long-distance, broadband, enterprise-data, and wholesale network services.

• Qwest Local Telephone ServiceFixed-line voice2000

  Local voice service was the core regulated offering of Qwest Corporation after the US West merger. It served residential, business, government, educational, and wholesale customers across the former US West territory in fourteen western and Midwestern states.

• Qwest Long DistanceLong-distance voice1996

  Qwest supplied long-distance calling to consumers and businesses and maintained separate entities for long-distance operations. Regulatory requirements associated with the US West merger affected its ability to provide long-distance service inside the local-service region.

• Qwest DSLBroadband internet

  DSL was Qwest's principal mass-market broadband product, delivered over its local telephone network. The service connected residential and business customers and also provided the platform for the company's attempted IPTV offering.

• Qwest Enterprise and Wholesale DataEnterprise telecommunications1996

  Qwest used its fiber and long-haul network to provide backbone connectivity, T1 services, broadband data, wholesale access, hosting-related services, and communications solutions for businesses, carriers, government bodies, and educational institutions.

• Qwest Choice TV / Qwest Digital TelevisionIPTV

  This DSL-delivered television service was offered in selected markets including Phoenix, Denver, Salt Lake City, Boise, and Omaha. It was no longer sold to new customers in 2008 and was retired in October of that year, with customers transferred to DirecTV.

• Qwest WirelessWireless telecommunications

  Qwest's wireless activities were conducted through a partnership with Verizon Wireless rather than through a wholly independent nationwide wireless network described in the reference material.

• 2008Movearoo.com

  United States

  Qwest partnered with AT&T and Verizon to launch Movearoo.com, a web service intended to help people moving homes identify available local communications providers.

  Outcome. The service was a partnership initiative rather than a standalone Qwest product; its later operating status is not established in the supplied material.

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• 2010Agree to be acquired by CenturyLinkM&A

  Qwest remained a major regional carrier but faced the consolidation pressures and financial demands of the telecommunications industry.

  What changed. Qwest agreed to an all-stock acquisition by CenturyLink. The transaction closed in 2011.

  Aftermath. Qwest ceased to operate as an independent brand and began doing business as CenturyLink in August 2011.

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• 2008Retire Qwest Choice TVGeneration change

  Qwest's DSL-based IPTV service had limited market availability and was no longer offered to new customers by 2008.

  What changed. Qwest retired the IPTV service and moved customers to DirecTV, leaving DirecTV as its television offering in the described markets.

  Aftermath. Qwest withdrew from operating its own IPTV platform and continued television distribution through its partner.

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• 2002Sell the QwestDex directory businessStrategy

  Qwest carried substantial debt after its expansion and faced pressure following the telecommunications downturn. Its directory operation was a non-core asset that could generate cash.

  What changed. Qwest agreed to sell QwestDex to private-equity firms; the completed transaction produced Dex Media.

  Aftermath. The sale provided a source of liquidity and separated the directory business from Qwest's telecommunications operations.

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• 2007Joseph Nacchio insider-trading convictionControversy

  Nacchio was convicted on nineteen insider-trading counts involving Qwest stock. He later began serving a federal sentence.

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• 2006NSA surveillance and records controversyControversy

  Qwest was reported to have declined participation in a proposed NSA telephone-records and surveillance program. The issue generated litigation and public debate about carrier obligations and government surveillance.

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• 2005SEC civil claims against former executivesControversy

  The SEC filed civil claims against former chairman and CEO Joseph Nacchio, former president and COO Afshin Mohebbi, and other former employees over alleged fraud and accounting irregularities.

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• 2002Accounting and Enron broadband transactionsControversy

  Qwest was involved in accounting controversies, including transactions with Enron's broadband division that were examined as potentially helping conceal losses.

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• 2001Pennsylvania deceptive advertising caseControversy

  Pennsylvania consumer-protection authorities imposed a penalty related to deceptive advertising and slamming allegations.

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• 2000Slamming and unauthorized long-distance switchingControversy

  Qwest faced allegations that customers were moved to its long-distance service without authorization. The company paid a federal penalty and agreed to compliance measures for sales staff.

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• 2011Qwest begins operating as CenturyLink

  After the merger closed, Qwest operations began doing business under the CenturyLink name, ending Qwest as an independent consumer-facing brand.

  M&ALeadership change
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• 2010CenturyLink announces acquisition of Qwest

  CenturyLink announced an all-stock transaction to acquire Qwest and combine the two telecommunications carriers.

  M&A
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• 2008Qwest retires Choice TV IPTV service

  Qwest discontinued its DSL-based IPTV offering after removing it from sale to new customers and transferred remaining television customers to DirecTV.

  Product generation
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• 2002Qwest agrees to sell QwestDex directory operations

  Qwest agreed to divest its directory business in a transaction that led to the creation of Dex Media.

  M&A
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• 2000Qwest completes combination with US West

  Qwest absorbed US West, gaining a large incumbent local telephone footprint across fourteen western and Midwestern states.

  M&A
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1. Qwest