- 22 - Using the MCI Denver-El Paso project as an example, Qwest used the incremental cost allocation method as follows:14 Indirect costs allocated to Qwest’s retained assets Qwest conduit miles 2,295 Times: incremental cost/mile * $6,500 $14,917,629 Plus: Qwest capitalized interest + 1,072,296 Project costs allocated to Qwest $15,989,925 Indirect costs allocated to customer contracts Total project costs $39,151,405 Less: project costs (15,989,925) allocated to Qwest Project costs allocated to customer $23,161,480 Divide: customer conduit miles / 761 Incremental cost/mile allocated to customer $30,422 B. Incremental Cost Allocation Method in the IRU Projects Qwest also used an incremental cost allocation method to allocate costs for the IRU projects involving WorldCom. For these projects, Qwest allocated existing conduit costs, the labor costs of pulling fiber, and right-of-way costs entirely to the IRU agreement because these costs did not increase by installing a cable with more than 24 fibers.15 The cost of new conduit, or 14 We note that these calculations were provided by petitioners, and there appear to be mathematical errors. However, because petitioners relied on these calculations, we have left the errors uncorrected. 15 For the WorldCom Dallas-Houston project, since the fiber was previously installed for Qwest’s account, Qwest allocated the existing conduit costs, the costs of pulling fiber through that (continued...)Page: Previous 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 Next
Last modified: May 25, 2011