================================================================================
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
June 29, 1999
Date of Report (Date of earliest event reported)
QWEST COMMUNICATIONS INTERNATIONAL INC.
(Exact name of registrant as specified in its charter)
------------------------
Delaware 000-22609 84-1339282
(State of other jurisdiction (Commission (IRS employer
of incorporation) file no.) identification no.)
700 Qwest Tower
555 Seventeenth Street
Denver, Colorado 80202
(Address of principal executive offices) (Zip code)
(303) 291-1400
Registrant's telephone number,
including area code
Not applicable
(Former name or address, if changed since last report)
================================================================================
<PAGE>
Item 5. Other Events.
On June 27, 1999, Qwest Communications International Inc., a Delaware
corporation ("Qwest"), issued a press release in connection with a letter it
delivered on June 25, 1999, to Mr. Solomon D. Trujillo, Chairman, President and
Chief Executive Officer of U S WEST, Inc., a Delaware corporation ("U S WEST").
A copy of the Qwest press release, dated June 27, 1999, which includes the
letter delivered to Mr. Trujillo, is attached hereto as Exhibit 99.1 and is
incorporated herein by reference.
This Current Report on Form 8-K may contain forward-looking statements that
involve risks and uncertainties. These statements may differ materially from
actual future events or results. Readers are referred to the documents filed by
Qwest with the SEC, specifically the most recent reports which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements, including potential fluctuations in
quarterly results, dependence on new product development, rapid technological
and market change, failure to complete the network on schedule and on budget,
financial risk management and future growth subject to risks, Qwest's ability to
achieve Year 2000 compliance, and adverse changes in the regulatory or
legislative environment. This release and the attachments include analysts'
estimates and other information prepared by third parties for which Qwest
assumes no responsibility. In addition, certain statements regarding synergies
and other projections and information contained in this release and the
attachments are based on publicly available information regarding U S WEST and
Frontier. Qwest undertakes no obligation to review or confirm analysts'
expectations or estimates or such publicly available information or to release
publicly any revisions to any forward-looking statements to reflect events or
circumstances after the date hereof or to reflect the occurrence of
unanticipated events.
Item 7. Financial Statements, Pro Forma Financial Information and Exhibits.
Exhibit 99.1 -- Press release of the Registrant, dated June 27, 1999.
2
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
QWEST COMMUNICATIONS
INTERNATIONAL INC.
By: /s/ Robert S. Woodruff
-----------------------------------
Name: Robert S. Woodruff
Title: Executive Vice President -
Finance and Chief Financial
Officer
June 29, 1999
3
<PAGE>
EXHIBIT INDEX
Exhibit 99.1 -- Press release of the Registrant, dated June 27, 1999.
4
Exhibit 99.1
Letterhead of Qwest Communications
FOR IMMEDIATE RELEASE Contacts: Media Contact: Investor Contact:
Tyler Gronbach Lee Wolfe
(303) 992-2155 800-567-7296
[email protected] [email protected]
QWEST COMMUNICATIONS BID FOR U S WEST WILL NOT ENCOUNTER
TOUGH FCC REGULATORY HURDLES
-- Former FCC Chairman Declares Qwest Plan to Surrender
Long-Distance Revenues in U S WEST Region is "Clear,
Simple and Effective" --
Denver, June 27, 1999 -- Qwest Communications International Inc. (Nasdaq: QWST)
said today that it does not expect to encounter any difficulty in obtaining the
necessary FCC regulatory approvals to complete its proposed mergers with U S
WEST, Inc. and Frontier Corporation.
James H. Quello, former FCC Commissioner for 23 years and former interim FCC
Chairman, concluded in a letter addressed to Joseph P. Nacchio, Qwest Chairman
and CEO, that the company's plans to divest its inter-LATA revenues and
operations in the 14-state U S WEST region is "a clear, simple and effective way
of complying with the requirements of section 271" of the Telecommunications Act
of 1996.
Qwest said that the long distance revenues that might be divested constitute
less than one percent of the combined company's operations. Qwest also said that
it would restart its long-distance business after the combined company achieved
Section 271 compliance.
Nacchio summarized Qwest's position on the regulatory aspects of the combination
in a letter to Solomon D. Trujillo, Chairman, President and CEO of U S WEST. The
full text of Nacchio's letter to Trujillo, and of Quello's letter to Nacchio are
attached to this release.
<PAGE>
About Qwest
Qwest Communications International Inc. (Nasdaq: QWST) is a leader in reliable
and secure broadband Internet-based data, voice and image communications for
businesses and consumers. Headquartered in Denver, Qwest has more than 8,500
employees working in North America, Europe and Mexico. The Qwest Macro
Capacity(R) Fiber Network, designed with the newest optical networking, will
span more than 18,500 route miles in the United States when it is completed by
mid-1999, and an additional 315-mile network route that will be completed by the
end of the year. In addition, Qwest and KPN, the Dutch telecommunications
company, have formed a venture to build and operate a high-capacity European
fiber optic, Internet Protocol-based network that has 2,100 miles and will span
9,100 miles when it is completed in 2001. Qwest also has nearly completed a
1,400-mile network in Mexico. For more information, please visit the Qwest web
site at www.qwest.com.
# # #
This release and its attachments may contain forward-looking statements that
involve risks and uncertainties. These statements may differ materially from
actual future events or results. Readers are referred to the documents filed by
Qwest with the SEC, specifically the most recent reports which identify
important risk factors that could cause actual results to differ from those
contained in the forward-looking statements, including potential fluctuations in
quarterly results, dependence on new product development, rapid technological
and market change, failure to complete the network on schedule and on budget,
financial risk management and future growth subject to risks, Qwest's ability to
achieve Year 2000 compliance, and adverse changes in the regulatory or
legislative environment. Qwest undertakes no obligation to review or confirm
analysts' expectations or estimates or to release publicly any revisions to any
forward-looking statements to reflect events or circumstances after the date
hereof or to reflect the occurrence of unanticipated events.
The Qwest logo is a registered trademark of Qwest Communications International
Inc. in the U.S. and certain other countries.
<PAGE>
June 25, 1999
Mr. Solomon Trujillo
Chairman, President and
Chief Executive Officer
U S WEST, Inc.
1801 California Street
Denver, Colorado 80202
Dear Sol:
I understand that concerns may have been expressed that Qwest's proposed
acquisition of U S WEST and Frontier Corporation might face tough regulatory
hurdles. I write to reiterate that Qwest is fully capable of successfully
resolving any regulatory issues that it may face in connection with these
transactions. There are no minefields. Clearly, Qwest's proposed acquisition of
Frontier has few, if any, regulatory ramifications. In this connection, Qwest
has demonstrated that it is capable of securing the regulatory approvals needed
to acquire control of another telecommunications carrier in a highly expeditious
manner. For example, we completed the approval process in connection with our
recent acquisition of LCI International -- in all 50 states -- in only 88 days.
With respect to U S WEST, we believe that Qwest's bid does not raise regulatory
issues any more troublesome than those raised by Global Crossing's offer. We
said previously that we fully expect to close Qwest's acquisition of U S WEST
within approximately one year, and that our ability to do so will not be
affected by our proposed acquisition of Frontier. Indeed, given Qwest's
extensive experience in providing telecommunications services to both business
and residential customers, we expect to obtain the requisite regulatory
approvals more quickly than Global Crossing. State commissions understandably
will question whether Global Crossing -- a foreign corporation with fewer than
250 employees whose only experience is as a wholesale carrier's carrier -- has
the necessary qualifications to provide local telephone service.
Moreover, we have publicly stated that our commitment to competition in the
delivery of local telecommunications services will effectively complement U S
WEST's stated plans to achieve Section 271 compliance. To this end, we
repeatedly and unequivocally have stated our intention to divest Qwest customers
and traffic within the U S WEST region prior to closing the acquisition of U S
WEST, thereby obviating any conceivable regulatory impediment to the
transaction. Our conclusion that disposition of Qwest's interLATA activities in
the U S WEST region will moot any concerns with regard to Section 271 compliance
is buttressed by the views of former FCC Chairman and Commissioner James H.
Quello, who states in the attached letter that disposing of Qwest's interLATA
traffic as we have proposed "would obviate any concerns with respect to the
application of Section 271 to the U S WEST transaction."
Qwest's interLATA activities within the U S WEST region account for only
approximately 6 percent of its current revenues. Following completion of Qwest's
acquisition of U S WEST, this figure would be reduced to approximately 1 percent
of the revenues of the combined entity. Suspending Qwest's interLATA activities
within the U S WEST region for a limited time therefore would not constitute an
impediment to our ability to complete the transaction. We would restart our
interLATA activities in the region on a state-by-state basis as we achieved
Section 271 compliance. We would expect you to accelerate your efforts to
achieve compliance even before the closing of our transaction -- a pledge that
you apparently gave to Global Crossing in connection with its offer. In short,
the temporary suspension of our interLATA business in the U S WEST region will
not significantly affect shareholders, customers or employees.
Notwithstanding implications to the contrary, a combined Global
Crossing/Frontier entity has the same issues -- it also would be subject to
similar divestiture obligations with respect to Frontier's interLATA activities
in the U S WEST region. The differences are not ones of kind, but only of
degree. If Global Crossing/Frontier has less of a problem here, it is only
because they have fewer customers and less traffic in the region. Indeed, we
believe that Qwest's current scale and scope, and our experience in providing
integrated product service offerings, make us far more capable of handling this
transition than Global Crossing could.
The invalidation of our co-marketing arrangement has no bearing on our ability
to clear all regulatory requirements. The concern with that arrangement arose
mainly because U S WEST may have seemed to be offering long-distance services
under its own name. This problem does not even arise if we divest our interLATA
business within the U S WEST region until we achieve Section 271 compliance.
Finally, we are not aware of any regulatory or other provision implicated by the
fact that Qwest's corporate headquarters is located in U S WEST territory.
Global Crossing, however, is a foreign corporation, based in a non-WTO member
state. If anything, Global Crossing's Bermuda citizenship raises public interest
concerns and regulatory hurdles that at least will delay completion of its
proposed acquisition of U S WEST.
I trust this discussion and the attached letter from Commissioner Quello will be
useful to you and your Board of Directors as you continue to evaluate Qwest's
revised proposal.
Sincerely,
/s/ Joseph P. Nacchio
- -----------------------
Joseph P. Nacchio
Cc: Mr. Joseph P. Clayton
Chief Executive Officer
Frontier Corporation
<PAGE>
June 25, 1999
Mr. Joseph P. Nacchio
Chairman & Chief Executive Officer
Qwest Communications International Inc.
555 Seventeenth Street
Denver, Colorado 80202
Dear Mr. Nacchio:
I was an FCC Commissioner for 23 years and in 1993-94 was interim Chairman of
the Commission. You have asked for my views with respect to certain matters
arising in connection with the proposal of your company to acquire U S WEST and
Frontier Corporation.
I am familiar with the facts pertinent to the alternative acquisition proposals
of Qwest and Global Crossing Ltd. and with the applicable law and regulation. I
am aware that concerns have been raised as to whether Qwest can acquire U S WEST
in a manner consistent with the provisions of Section 271 of the
Telecommunications Act of 1996.
In my view, there is no question that, based on the law and the facts in this
case, Qwest's disposition of its interLATA assets in U S WEST's region would
provide a simple, quick and effective way of complying with the requirements of
Section 271. Qwest could effectively dispose of its interLATA traffic with
little delay, and doing so would obviate any concerns with respect to the
application of Section 271 to the U S WEST transaction. Furthermore, Qwest's
proposed purchase of U S WEST would not raise any regulatory issues that would
not likewise be raised by Global Crossing's proposed acquisition of U S WEST and
Frontier.
Finally, any comparison of Qwest's current proposal to acquire U S WEST to the
companies' prior proposed teaming arrangement misses the point. I say this
because the statutory concerns that were implicated by that arrangement clearly
would be mooted by the disposition of Qwest's interLATA assets.
Sincerely,
/s/ James H. Quello
- ---------------------------
James H. Quello
# # #
