[1st-mile-nm] Albuquerque and Qwest quarreling over franchise

[Carroll Cagle]

  City says Qwest is stalling at table 

 

Albuquerque Journal - Business Outlook

Thursday, November 29, 2007 





By <http://www.abqjournal.com/cgi-bin/email_reporter.pl>  Jack King 
Copyright C 2007 Albuquerque Journal; Journal Staff Writer
    City of Albuquerque attorneys are threatening to ask the City Council to
seek the eviction of Qwest Communications from the rights of way the company
uses to provide telephone service in the city.
    They say Qwest keeps stalling about renegotiating a franchise agreement
with the city that ended in 2000.
    Under state statute, a city may pass an ordinance giving a franchise to
any entity for the operation of a public utility. Qwest's franchise
agreement allows it to use city rights of way for its wires and other
equipment. Since the agreement ended, the company has been on a
month-to-month contract with the city.
    Qwest pays a franchise fee to the city equal to 3 percent of its local
gross revenue.
    The company paid the city about $3.2 million in fiscal year 2006, when
the city's general fund revenue totalled $447 million, according to City
Economist Jacques Blair.
    But city attorneys said keeping a franchise agreement current is about
more than money.
    City Attorney Robert White said a new agreement would cover issues like
relocating equipment when rights of way are closed and the use of rights of
way for new technologies. It also would ensure that Qwest and any new phone
companies that come to Albuquerque are on an equal footing.
    Assistant City Attorney Carolyn Fudge said the city wants access to
Qwest's books to ensure it is paying enough money.
    Albuquerque is only one of 36 municipalities in the state where Qwest is
operating with an expired franchise agreement, according to the New Mexico
Municipal League.
    Qwest's New Mexico attorney, Tim Goodwin, denied the company is stalling
in its negotiations with the city. He said he has communicated with city
attorneys twice since March about the franchise agreement. Fudge told the
Journal she does not recall those communications.
    "I can remember one phone call about something else, railroad rights of
way, during which I said, 'Oh, by the way, why aren't we talking about the
franchise?' And there was no response to that remark," Fudge said.
    White and Fudge said they are currently negotiating a telephone
franchise agreement with Time Warner and plan to send a new master ordinance
governing telephone franchises to the council in early December.
    Last week, they sent a letter to both Qwest and Verizon Business, which
also has approached the city about a franchise, offering the companies a
last chance to comment on the new ordinance, White said.
    Fudge said City Chief Administrative Officer Bruce J. Perlman sent Qwest
a letter in January stating that unless the company reached a new franchise
agreement with the city in 90 days he would stop accepting its
month-to-month franchise payments and ask the City Council for a motion
asking attorneys to seek a writ of ejectment.
    After receiving the letter, Qwest officials contacted Perlman saying
they wanted to enter negotiations. He notified them in May that he would
suspend the 90-day deadline for a reasonable period to allow good-faith
negotiations, but has not heard back from the company since, Fudge said.
    In May, the city sent Qwest, Verizon Business and Time Warner the draft
of a proposed master ordinance governing franchise agreements. Since then
there have been good-faith negotiations with Time Warner, but not with Qwest
or Verizon Business, Fudge said.
    "If we reach a fair and reasonable agreement with Time Warner, and pass
that ordinance, the next step would be to take Qwest to court," Fudge said.
    She said she couldn't tell when the Time Warner agreement would be
reached.
    William Fulginiti, executive director of the New Mexico Municipal
League, said companies have developed a number of new products and services
in the last several years. Qwest may not want to renegotiate its franchise
agreements because it doesn't want to give municipalities the chance to add
the revenue from its new services to its payments, he said.
    Goodwin agreed that he objects to Qwest's having to pay a percentage of
its gross receipts for a franchise. He said federal law requires that the
city collect a franchise fee based on the city's cost of administering its
right of way. But he denied this was the reason for not negotiating with New
Mexico cities.
    Where Qwest and the cities have failed to begin negotiating new
franchise agreements, "sometimes it's just inertia and both parties agreeing
that it operates to the mutual benefit of both," he said.
    In fact, city officials in Clovis, Farmington, Grants and Las Cruces,
all of which are on the Municipal League's list, said that even though their
franchises with Qwest have expired, they continue to receive franchise fee
payments, based on those agreements, from Qwest and currently are satisfied
with that arrangement.

 

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