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Friday, August 01, 2008

City Gets $40M Qwest Project

By Andrew Webb
Journal Staff Writer
       SANTA FE — Qwest Communications will proceed with building a $40 million cybercenter in Albuquerque, now that it has the blessing of the Public Regulation Commission to count some of the investment toward state-mandated service improvements.
    The center will allow Qwest's corporate customers to store computer equipment and backup data in a secure, controlled environment with direct hookups to major communications backbones.
    The cybercenter, to be housed in a former call center space at Qwest's Downtown Albuquerque office building, will be among more than a dozen in cities around the country.
    The PRC ruled Thursday that Qwest could count $7.8 million worth of investments in the planned data center toward $255 million in infrastructure improvements required under a two-year-old agreement between the Denver company and the state.
    When it made its request earlier this month, Qwest asked to count $10 million — the entirety of its expected initial investment in the cybercenter — toward that fund.
    The money is subject to a 2006 agreement between Qwest and the state, called the Second Amended Settlement Agreement, or SASA. It was reached after the PRC found that Qwest had failed to meet previous infrastructure investment targets that were contemplated in the customer rates approved for the company.
    Qwest has said it plans to use the initial $10 million to make immediate upgrades and will spend up to $30 million more of its own money to expand as customers are added.
    The SASA agreement calls for investing $255 million by 2010 for various projects. These include nearly doubling high-speed Internet access in rural areas, upgrades to existing systems and the expenditure of at least $50 million on advanced technology services throughout its service territory.
    Opponents, which included the state's Department of Information Technology, the PRC's own telecommunications staff and an existing Albuquerque data center, argued that the cybercenter investment would do nothing to improve telephone or Internet service for most of Qwest's customers, such as residential users. Furthermore, they questioned why Qwest didn't want to spend any of its own money outside of the promised investment on the first stages of the project.
    On Wednesday, Qwest said in a letter to the PRC that it would spend $2.2 million if $7.8 million could count toward the SASA investment requirements.
    Commission Chairman Jason Marks on Thursday acknowledged that the project straddled "the borderline between what we did and did not envision in creating the SASA."
    But, he said, the project would help anchor Qwest in the state, potentially attract some of its customers here, and could help spur further development.
    "If Qwest is not a going concern in New Mexico, it brings the rest of the system down," he said.
    At the urging of opponents, the PRC also vowed to make the ruling a one-time decision.
    "I think the order should be clear that this (does not set a precedent)," Marks said. "Every project out of SASA needs to be considered on its own."
    The final agreement with Qwest will also include a provision that if Qwest discontinues the cybercenter project within five years, the funds will revert back to the SASA.
    Opponents could still appeal the ruling.
    Jeff Albright, an attorney representing Albuquerque-based data center operator Oso Grande Technologies, said he would seek his client's input on whether to appeal the ruling, but noted that the amendments made to Qwest's original request were improvements.
    "It does commit Qwest to additional investment here," he said.
    Qwest New Mexico president Loretta Armenta said the project would likely begin soon.
    "We're elated to bring such exciting and advanced technology to New Mexico," she said. "This will put us on a global map."
    Qwest has previously said it had a customer waiting in the wings for the cybercenter. Company spokesman Gary Younger on Thursday said the firm remains in negotiations with that potential customer.