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incremental base rate could be adjusted to reflect variations in
conduit material costs. For example, Qwest adjusted its
incremental base rate for the MCI Denver-El Paso conduit project
from $6,019 to $6,500 per conduit mile due to an increase in
conduit material costs from $2,376 to $2,856 per mile.13
The incremental base rate did not include the cost of
digging the trench or the costs associated with perfecting the
rights-of-way because these costs would have been incurred when
installing the conduit for the third-party customer regardless of
whether Qwest chose to install additional conduit. The
incremental base rate did not include adjustments based on
terrain and was not increased as a result of budget overruns.
Using the incremental base rate, with appropriate
adjustments, Qwest determined the incremental costs per conduit
mile of conduits retained by Qwest were:
Incremental cost
Project per conduit mile
MCI San Jose-Reno-Wells $8,129
MCI Salt Lake City-Denver 7,629
MFS Los Angeles 6,019
MFS Dallas 6,019
Viacom San Francisco Bay 6,019
MCI Denver-El Paso 6,500
MCI Kansas City-St. Louis 5,999
US West Phoenix-Mesa 5,066
MCImetro Dallas 5,417
US West Grants-Gallup 6,806
MFS Anaheim 6,584
13 The $1 discrepancy is due to rounding.
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