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Qwest Files Suit to Block UTOPIA
Unable to get the Utah Legislature to kill municipal broadband in Utah and rebuffed time and again at City Council meetings, Qwest has now taken the battle to the courts. Qwest filed suit Monday alleging that UTOPIA is unfairly using its status as a government agency and offering services below market prices. There were stories in the Deseret News and the Salt Lake Tribune.
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…. 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.From Salt Lake Tribune - Utah
Referenced Thu Jun 02 2005 09:24:36 GMT-0600 (MDT)
Suppose I wanted to go into the road building business. Do you think I’d get very far claiming that UDOT had an unfair advantage and was building free-access roads that I couldn’t compete with? Not likely.
Posted by windley on June 2, 2005 9:18 AM
Comment from Jack Krupansky at June 2, 2005 11:27 AM
Normally I'd agree, if not for the fact that Qwest is regulated within the state. Part of the "deal" to accept regulation is that Qwest gets certain "rights". If you would like to see that such "rights" are stripped from Qwest, then simply suggest that the regulations be removed as well.
I'm all for a level playing field, but frankly, a lot of these so-called municipal networking efforts are really quite disingenuous and themselves seeking a very unlevel playing field.
So, you want to get into roadbuilding? Fine. Are you under analogous regulatory restrictions as Qwest? Of course you're not, so the analogy doesn't hold up.
I'd invite you to find an analogy that *does* hold up.
-- Jack Krupansky
Comment from Phil Windley at June 2, 2005 11:34 AM
You don't think a private road builder would have to meet all kinds of government regulation?
In truth, all businesses bear a regulatory burden. What you're really talking about is pricing regulation.
That's a red herring in my opinion. First of all, only a fraction of Qwests consumer services are subject to pricing regulation. Second, Qwest isn't complaining that their competitors are charing more. They're arguing that their competitors are charging less.
What's more, Qwest and other, get return on their regulatory burden in the form of nearly free access to right of way on public roads.
I'm very much in favor of reducing considerably the regulations governments impose on telecommunications. I suspect that Qwest doesn't want that.
Comment from the head lemur at June 2, 2005 8:43 PM
It is not Qwest as much as every small town and hamlet has some sort of city telephone access tax, as well as regulation. Cities and towns like that 'free' money.
Offering services below market prices? What a bunch of crybabies. They are guilty of their own arrogance. Here in Phoenix, they are getting their lunch eaten by the cable companies, the wireless guys, and Small telcos who provision voice, data, and IP for substantial savings.
They laid fiber in Phoenix about 8 years ago and it sat in the boxes unterminated for years.
The sooner they either wake up or go out of business the better off everyone will be.
Comment from Gordon Weakliem at June 2, 2005 9:05 PM
That analogy to road building isn't just a hypothetical, in Colorado there's a private company proposing to build a road/rail bypass from Fort Collins to south of Denver, hoping to sell a toll option to truckers who want to avoid downtown Denver. I don't know about the regulations involved, but I'm pretty sure that they do have some sort of powers of condemnation under some goofy 19th century laws written for miners.
I do agree with Phil's comment that Qwest's real money isn't in the regulated services. Qwest has done a horrible job at predicting where the growth in telecom would be, to wit, Qwest screwed themselves in wireless, giving up their business there in favor of a reseller deal with Sprint. There was actually a story on that in last Sunday's Denver Post.