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May 8th, 2002 Chris Lydgate | News Stories
 

Qwest Qwapitulates

     
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Victory!

After a yearlong battle, telecom goliath Qwest Communications International last week bowed to public pressure--and a WW readers' campaign--and finally agreed to pay 88 Oregon cities a total of $8.4 million in withheld franchise fees.

According to the agreement, Qwest will pay the City of Portland $3,774,893.89 for three quarterly payments withheld last year--including $103,511 in interest--by May 14. Qwest will also make a further quarterly payment for the first three months of this year.

City officials, facing the tightest budget squeeze in years, were raising their julep glasses last week and shedding tears of relief.

Qwest decided to withhold its 7-percent franchise fee last year after concluding that an obscure court ruling in Washington state meant it didn't have to pay fees to local governments.

For Portland, Qwest's sudden attack of fee-phobia could not have come at a worse time. While Qwest mobilized an elite squad of high-priced lawyers to argue its case in court, the recession pushed the city of Portland into a severe budget shortfall of $18.6 million from its general fund.

"It's the worst case of corporate citizenship I've seen since I've been in office," says city Commissioner Erik Sten. "It would almost be funny, if it weren't having such a bad impact on the city's budget."

In March, federal Magistrate Judge John Jelderks threw Qwest's case out of court, concluding that franchise fees are "fair and reasonable compensation" for the city's right of way. But Qwest still refused to pay up.

Exactly what happened to change Qwest's tune remains unclear. But we are convinced that our Deride the Light campaign--asking readers to withhold their franchise fee from Qwest--made the crucial difference.

If you are one of the thousands (OK, maybe dozens) of readers who withheld your fee (roughly 37 cents on the average bill), now is the time to pat yourselves on the back and then--this is important--pay dear old Qwest the money you owe so it can finally fork it over to the city.

 
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