Anschutz Company and Subsidiaries - Page 14

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                    3.   Projects With No Third-Party Customer8                       
               In two instances, Qwest installed conduit and pulled fiber             
          for itself without having a customer contract in place.                     
               In the Cal Fiber project, Qwest linked unconnected segments            
          of empty conduit.  The unconnected segments of conduit were                 
          previously installed and retained by Qwest as part of the Coast             
          Route project.                                                              
               Qwest completed the Cal Fiber project in March 1995 by                 
          laying 153 miles of new conduit, pulling fiber through the                  
          conduit, and lighting the fiber.  The Cal Fiber project gave                
          Qwest a completed fiberoptic system from Roseville, California,             
          to Los Angeles, California.  Qwest’s total construction cost for            
          the Cal Fiber project was $32,496,284.  Northern Telecom Finance            
          Corporation provided financing for the majority of the Cal Fiber            
          project costs, with the balance funded by internal financing.               
               In the Dallas-Houston project, Qwest installed conduit,                
          pulled fiber, and lit the fiber for its own account.  Qwest began           
          construction of the Dallas-Houston project in February 1995 and             
          completed it in May 1997.  At the time Qwest began the Dallas-              
          Houston project, Qwest anticipated that WorldCom Network                    
          Services, Inc., d.b.a. WilTel (WilTel), would purchase the                  
          conduit, which it in fact did.  The Dallas-Houston project                  


               8  Cost allocations relating to projects without third-party           
          customers are not in issue.                                                 





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