Anschutz Company and Subsidiaries - Page 10

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          sales, and the value could be realized only if the conduit was              
          actually sold.                                                              
               Qwest hired Coopers & Lybrand LLP (CLC), a professional                
          consulting firm, to review its 1995 five-year plan.  CLC                    
          determined:  (1) The demand for long-distance conduit builds had            
          slowed; (2) the country did not need another nationwide                     
          fiberoptic network; (3) the creation of another network could not           
          be justified in terms of capacity or cost; (4) Qwest would be at            
          a cost disadvantage to existing nationwide carriers, such as MCI,           
          AT&T, and Sprint; (5) Qwest’s installation of additional conduit            
          would be “very risky”; and (6) Qwest’s revenue projections “may             
          be optimistic”.                                                             
               Qwest’s Board of Directors minutes for the period January              
          22, 1994, through December 23, 1996, do not contain any                     
          resolutions approving any of the five-year plans.                           
               B.   Construction Projects                                             
               During the years in issue, Qwest engaged in 21 construction            
          projects, 19 of which were for third-party customers.6  During              
          the years in issue, Qwest performed the majority of the                     
          construction, only subcontracting out small portions of the work.           
          In four construction projects, Qwest installed conduit or pulled            
          fiber for third-party customers without retaining assets for                


               6  The Cal Fiber and Dallas-Houston projects were not done             
          for third-party customers.                                                  





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