Is Qwest a Target of Corporate Takeover?

February 8 2010, 11:28 AM

The once-mighty Qwest Communications "appears to be on the block," writes The Denver Post, "with a growing number of Wall Street analysts speculating that the company is a prime acquisition target and senior management speaking more freely about consolidation." Rumors that the Denver-based company---worth about $20 billion---could be swallowed by a corporate predator have been swirling for some time, but talk has turned increasingly serious in the past few weeks. UBS analyst John Hodulik thinks "the final leg to the story comes in the form of M&A" (mergers and acquisitions). But what kind of company would cough up that kind of cash for a firm whose most valuable asset---phone landlines---is a dying business? The answer is smaller rural phone operators, such as CenturyLink and Windstream. Still, Qwest spokeswoman Diane Reberger declines to comment on that matter. Meanwhile, Qwest is apparently intervening in what its customers are doing online, according to an article about Pueblo's Cathi "Cat" Paradiso on CNET. Paradiso's Internet service was suspended after Hollywood studios accused her of copyright violations when her account downloaded 18 films and TV shows, including Harry Potter films and South Park. As a 53-year-old grandmother, she says she wasn't watching the shows but rather was a victim of Internet siphoning. She fears if she is cut off by Qwest, she won't be able to get service with any other providers.

"Take me off your hit list," Paradiso wrote in a January 15 e-mail to some of the studios that accused her. "I have never downloaded a movie. Period.... My livelihood depends on my ISP's reliability. Look for the perpetrator and leave my service alone." After a major hassle, she was eventually cleared when a Qwest technician discovered her connection had been compromised.