Qwest Communications International's revolver received a boost from speculation that the Federal Communications Commission is going to repeal its provision that requires regional bell companies to rent their networks to long-distance companies at below-cost rates. A repeal would hurt the efforts of long-distance companies to compete in the local arena, but regional bell operating companies, such as Qwest, would benefit from such a ruling, noted one dealer. Market players said a few small pieces of the company's revolver traded in the 94 1/2 95 range. The paper ticked up from the 93 level on the news.
Qwest has also recently received FCC approval to offer long-distance services in nine states and already has the infrastructure to go forward with these plans. The company will offer long-distance services in eight of those western states and is awaiting approval from Montana Public Utility Commission for its pricing matrix in order to enter the ninth, commented a Qwest spokesman.
In comparison, bankrupt WorldCom is one of the companies that could potentially be hurt by the ruling through its MCI Group, but bank debt levels for the company remained steady in the mid-20s. One analyst suggested that the impact of the potential ruling was muffled because nothing concrete has been proposed and any change would likely to be phased in and be challenged by state regulators. He conceded that such a change of policy has the potential to be negative by hurting the company's growth of its local business. Calls to John Dubel, WorldCom cfo, were not returned by press time.