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No five-year plans were ever adopted by Qwest’s Board of
Directors. Further, Mr. Anschutz, Mr. O’Callaghan, Mr. Pearce,
and other witnesses credibly testified that Qwest’s goal during
the years in issue was not to become a full-service
telecommunications company. Mr. Anschutz testified that “Our
intent was to make contracts with buyers for segments of
construction along the railroad and, if we could, to make money
on those contracts for construction and, in the process, lay
incremental conduit, or in some case fiber, as we went.” While
many of Qwest’s other transactions indicate that Qwest’s business
was expanding during the years in issue, these transactions do
not contradict the witnesses’s testimony. Many of the
transactions were entered into to service Qwest’s existing
telecommunications service customers. When questioned about the
telecommunications services offered during the years in issue,
Mr. Anschutz explained that those services were “an experiment
during the years in issue--yes there were substantial revenues,
but even larger losses, and that’s why the experiment was shut
down.”
It is not clear from respondent’s argument how, if we were
to accept his characterization of Qwest’s business strategy, this
would impact the reasonableness of Qwest’s incremental cost
allocation method. Presumably, it would cast doubt on
petitioners’ characterization of the economic reality of their
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