Anschutz Company and Subsidiaries - Page 21

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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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