Blog Post

We cut side deals, Qwest partners admit

WSJ.com :: Qwest Communications International Inc. came under intense scrutiny on Capitol Hill as three telecommunications companies said they cut side agreements with the Denver-based telecom concern that purportedly helped Qwest improperly recognize hundreds of millions of dollars in revenue in 2000 and 2001. The allegations came during a hearing by the investigations subcommittee of the House Energy and Commerce Committee, which has undertaken a seven-month probe into widespread use of telecom “swaps” of fiber-optic capacity. Under such swaps, companies such as Qwest and Global Crossing Ltd. traded sometimes equal amounts of telecom capacity, recognizing revenue gains on their financial statements in the process.