January 2, 2002 -- Qwest Communications International Inc. (NYSE: Q) says it's on track to file in March 2002 with the Federal Communications Commission (FCC) to sell long-distance service in Arizona, with the completion of a critical and comprehensive systems test. Qwest completed the test in December 2001. Cap Gemini Ernst & Young, the independent administrator of the test, declared that Qwest gives its competitors the access to the computers, switches and lines for local phone service required for FCC approval under federal law.

In its 700-page report, issued on December 21, 2001, Cap Gemini said that "Qwest provides non-discriminatory access to its operational support systems (OSS) to competitive local exchange carriers (CLECs)" and "the experience of a CLEC using the various OSS interfaces is substantially the same to that of Qwest performing similar activities." OSS are the computers, processes and systems that facilitate ordering, installation, repair, billing and other services a communications company provides to customers. During the test, Cap Gemini says it monitored thousands of CLEC transactions processed by Qwest to evaluate the functions and performance of Qwest's OSS.

Cap Gemini's June 29, 2001 "Master Plan for Testing Qwest's Operations Support System in Arizona," characterizes the importance of the OSS test by noting, "Qwest's successful execution of this comprehensive independent Third Party Test Plan will demonstrate to the Arizona Corporation Commission, the Department of Justice and the Federal Communications Commission the operational readiness, performance, and capacity of the access to OSS that Qwest provides to CLECs."

Qwest expects to file its application in March 2002 for FCC approval to offer long-distance services in Arizona. Qwest expects to receive FCC approval 90 days after submitting the application.

Meanwhile, Qwest says it is making significant progress in collaborative testing of its OSS in the other 13 states in its local service area. KPMG Consulting, the third-party administrator for the 13-state process, recently completed another major test in its review, which verifies Qwest's ability to handle projected future volumes of customer orders from CLECs. Remaining tests in the 13 states are scheduled to be completed in February 2002. Qwest will file applications with the FCC for approval to sell long-distance service in the 13 states shortly afterward.

While the OSS tests have been ongoing, Qwest, its competitors and regulators have also been participating in separate state and regional workshops to determine Qwest's compliance with the remainder of the 14-point checklist mandated by the Telecommunications Act of 1996 for federal approval to sell long-distance service. To date, 12 states have completed workshops on all 14 checklist items. Of those 12 states, five have issued orders completing review of all checklist requirements: Colorado, Idaho, Iowa, Nebraska and Wyoming, subject to completion of the multi-state OSS test. The remaining seven states have issued final orders on most checklist items and are expected to complete their reviews in January and February. Qwest's actual performance in serving CLECs is equal to, or better than, Verizon's performance as well as SBC's performance in New York, Texas, Missouri and Arkansas -- states where the FCC has approved long-distance applications.

According to Qwest, a study by Professor Jerry A. Hausman, director of the Massachusetts Institute of Technology (MIT) Telecommunications Economics Research Program, concluded that residential and business customers in-region could save well over $1 billion annually with Qwest's long-distance re-entry. Additionally, Qwest cites a report by Consumer Action, an independent consumer non-profit organization, which found that long-distance rates are increasing everywhere except in states where the local exchange carrier has been approved to offer competitive long-distance services. The study found that rates actually decreased in these states.

When Qwest acquired U S WEST, the company had to divest itself of its long-distance holdings in the 14 western states where U S WEST provided local service. Under the Telecommunications Act of 1996, Qwest can re-enter the long-distance business once its application to the FCC has been approved.

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