Qwest sues, says UTOPIA poaches pole space

Published June 2, 2005 12:46 am
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The Utah Telecommunications Open Infrastructure Agency, or UTOPIA, is facing a new obstacle in its quest to provide residents in 14 municipalities the opportunity to connect their homes to a high-speed fiber-optic telecom network.

Qwest Corp., the Denver-based telecommunications giant that provides most Utahns with their residential phone service, filed a lawsuit Wednesday in the U.S. District Court for Utah to block UTOPIA from using its telephone poles without permission and to force the agency to pay sales and property taxes.

"UTOPIA is using our facilities without having signed a pole attachment agreement - something we require of everyone that wants to use our poles," Qwest's Utah spokesman Vince Hancock said. "Also, their contractor is ignoring important safety standards that are in place to protect linemen."

Qwest also contends that UTOPIA was responsible for a massive phone outage in Murray on May 24 that disrupted services to residences, a hospital, a shopping mall and other businesses in that city. Qwest estimates damages could be in excess of $400,000.

UTOPIA executive director Roger Black said he has not yet had time to study the lawsuit and could not comment on the allegations it raises.

"We do have allowances in our budget for litigation," Black said, noting that UTOPIA is in negotiations on an agreement to use Qwest's poles.

The lawsuit, however, asks the court to order UTOPIA to remove fiber optic lines that it already has laid on Qwest's telephone poles and to stop laying new lines until such an agreement is signed.

"We've tried to negotiate with them [UTOPIA] and there is an agreement out there," Hancock said. "The problem is they want to dictate changes to that agreement, which is exactly the same thing that we require all companies to sign that want to use our facilities. We find that completely unacceptable."

UTOPIA was organized in 2002 by 18 Utah municipalities to explore the construction of a fiber-optic network that would serve all the homes and businesses within their cities.

Of the original UTOPIA founding cities, 11 remain part of the planned network and have pledged tax revenue to support a portion of the estimated $340 million in bonds necessary to complete construction of the network.

In its lawsuit, Qwest points out that UTOPIA, as an agency of the cities that created it, is exempt from sales and property taxes, which will enable it to operate and offer services over its network at below-market prices.

"These financial advantages, which are not available to Qwest or other private telecommunications companies that compete in the same wholesale and retail markets, provide UTOPIA with a distinct competitive advantage, which effectively prohibits other companies from competing with UTOPIA," Qwest alleges in its lawsuit.

Qwest is asking the court to order UTOPIA to pay sales and property taxes or to include the amount of those taxes into the rates it intends to charge potential customers for high-speed Internet, telephone and television services.

UTOPIA currently is constructing its network in six of its member cities - West Valley, Murray, Midvale, Lindon, Orem and Payson, Black said.

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