The board of directors at cash-strapped Qwest Communications
has fired CEO Joseph Nacchio and named former Ameritech chief Richard
Notebaert as his replacement.
The ousting of Nacchio brings an end to topsy-turvy years at the
telecommunications firm, a tenure that included the transformation of the
Colorado firm from a broadband fiber-optic data center into a legitimate
contender in the phone service industry.
Qwest, which provides Internet, data, multimedia, and voice services over a
broadband fiber-optic network, is also facing an investigation by the
Securities and Exchange Commission (SEC) over accounting procedures.
In a brief statement Monday, Qwest announced the CEO switch and said Nacchio
would serve as a consultant for up to two years, “to assist in transition,
strategy, planning and other matters of importance to the company.”
“When Joe Nacchio came on board in 1997, Qwest was a very different company.
We had a foundation, but needed a leader to bring technology and a vision to
life and grow Qwest into a full-service communications company…Joe Nacchio
did that and more — he brought a renewed focus on customer service and
prepared us for re-entry into the long-distance business,” the company said.
It is the second high-profile CEO exit among big name telcos, following the
departure of
WorldCom boss Bernard Ebbers a month ago.
Qwest also announced the resignation of Philip Anschutz as non-executive
chairman of the board. Anschutz remains a director and chairman of the
executive committee of the board.
Notebaert joins Qwest from Ameritech, where he served as chairman and CEO of
the regional Bell company in five Midwestern states.
Nacchio spent his final days at Qwest trying to convince
shareholders that the sale of the carrier’s directory service would reap
$8 billion to $10 billion.
He was also manning the ship through another SEC
investigation that Qwest bought competitors’ silence on regulatory
matters through secret deals for access to its local phone network.
Reports say state regulators are probing whether the Qwest gave some
carriers better terms of use in its 14-state area in exchange for support of
Qwest’s plans to add to its long-distance business. Qwest denied it did
anything wrong, and has tried to head off state investigations by asking the
FCC to issue a ruling.
In addition to investigations in Arizona, New Mexico, Oregon, and Utah,
Qwest faces up to $200 million in fines in Minnesota after a yearlong
investigation by that state’s Department of Commerce.