Denver, May 25, 2001 ? Qwest Communications International Inc. (NYSE:Q), the broadband Internet communications company, won its challenge against the City of Berkeley and received a U.S. District Court order striking down the city?s telecommunications ordinance and forcing the city to promptly issue construction permits needed by Qwest to serve its customers.
The ordinance, which required non-cost based fees, onerous reporting requirements, application fees and unnecessary regulation of Qwest?s business, was struck down in its entirety. Qwest filed the lawsuit in February because the city refused to grant Qwest access to public streets to install equipment to provide advanced communications services to customers in the area.
?This ruling is a victory for competition in the telecommunications industry and will serve as a warning for other cities that attempt to impede competition by imposing unnecessary and unfair conditions like those contained in Berkeley?s ordinance,? said Steve Haggerty, senior vice president and chief of operations for Qwest?s local broadband operations unit. ?This decision will encourage more investment by competitors and lead to faster deployment of advanced services that benefit consumers and businesses alike.?
The California court order builds on a recent United States appeals court decision affirming Qwest?s right to place lines and equipment in streets and highways as long as Qwest obeys local public safety regulations and pays costs related to reviewing construction plans. For the first time, a federal appellate court confirmed that local regulations and fees unrelated to maintaining public safety violated federal law.
The appellate court recognized that cities have the authority to manage the use of the public streets to protect the health and safety of citizens, but that cities cannot use this authority to generate revenue and impose burdensome restrictions on companies seeking access to the streets. The appellate court noted that ?right-of-way management means control over the right-of-way itself, not control over the companies with facilities in the right-of-way.?
On July 10, 2000, Qwest applied to the City of Berkeley for the permits necessary to install its telecommunications equipment within the city. At that time, the city refused Qwest?s application and imposed a blanket moratorium on all construction until the passage of its proposed telecommunications ordinance.
During discussions with Qwest, the city conditioned Qwest?s permit on Qwest?s agreement to waive its rights to challenge the terms contained in the unwritten ordinance, and agree to pay any fees assessed in connection with the ordinance. The city unilaterally enacted its ordinance on January 21, 2001, forcing Qwest to file a lawsuit and delay construction necessary to serve its customers. The U.S. District Court agreed with Qwest?s contention that terms contained in the ordinance violated federal law by creating a substantial barrier to entry.
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