[1st-mile-nm] Money dispute stalls Qwest's CyberCenter

[Carroll Cagle]

  Kudos to State Department of Information Technology for its efforts.   Not
only does the Qwest proposal go outside the AFOR plan's desired outcomes, it
also would amount to a subsidized effort against existing companies Big Byte
and Oso Grande.

 

Carroll Cagle

 

 


Money Dispute Stalls Qwest's 'CyberCenter' 

 

Albuquerque Journal - front page

Thursday, July 17, 2008 


 <http://www.abqjournal.com/cgi-bin/email_reporter.pl?staff=yes> By Andrew
Webb
Journal Staff Writer
       Qwest Corp. hopes to build a $40 million "CyberCenter" in
Albuquerque, a project company officials say will make New Mexico more
attractive to high-tech businesses and could even give the state a better
shot at landing the Air Force Cyber Command Center.
    But there's a glitch.
    The company wants $10 million of the money it would invest in the
project to count against the $255 million it is required to spend to pay off
commitments to the state, and two opponents of the plan say that shouldn't
be allowed.
    The 40,000-square-foot center would allow Qwest's corporate customers to
store computer equipment and backup data in a secure, controlled environment
with direct hookups to major communications backbones. It would be housed in
a former call center space at Qwest's Downtown Albuquerque office building.
    Qwest says time is of the essence.
    Officials for the Denver-based company said this week a big customer is
waiting in the wings, and the project will likely go elsewhere if it doesn't
get the blessing of the Public Regulation Commission soon.
    Company officials say the $10 million will make or break the deal.
    The money is subject to a 2006 agreement between Qwest and the state,
called the Second Amended Settlement Agreement, or SASA. It was reached
after the Public Regulation Commission found Qwest had failed to meet
previous infrastructure investment targets that were contemplated in the
rates the company was allowed to charge.
    The agreement calls for investing $255 million by 2010 for various
projects. These include nearly doubling the provision of high-speed Internet
access in rural areas, upgrades to existing systems and the expenditure of
at least $50 million on advanced technology services throughout its service
territory.
    Qwest says it is meeting the specific goals and wants the $10 million
for the CyberCenter to count toward the general improvement requirements.
    If it builds the CyberCenter, the company expects to spend the $40
million to improve ventilation, utilities and other infrastructure in five
floors of its office building to house the center. The center would provide
backup and other data in an environment safe from natural disasters such as
floods and tornadoes and reduce their costs for housing computer equipment.
    The space was formerly used for about 300 sales and directory service
employees, which have been trimmed over the years as Qwest dealt with
rapidly changing communications trends and technologies, such as the switch
from traditional land-line telephones to wireless.
    Although the project has the backing of the city and business groups,
some, including the state's Department of Information Technology and the PRC
staff itself, question whether the $10 million investment would serve the
original agreement's purpose - to improve telephone and high-speed Internet
service and availability, especially in rural and underserved areas.
    Furthermore, they argue, at least two other companies already offer
similar service in Albuquerque.
    Qwest is expected to present the proposal to the PRC and ask for an
expedited decision today in Santa Fe.
    Normally, the company would make the investments and report them later
as expenditures allowed under the $255 million SASA agreement.
    But in this case, Qwest decided to seek the PRC's go-ahead before
proceeding, lest questions be raised later, New Mexico president Loretta
Armenta said.
    "We'd like to get started as soon as possible" on the project, Armenta
said. "We have this customer really waiting to hear back from us .... We've
really been champing at the bit to get this."
    The customer could not be named, she said.
    Qwest proposed the center to PRC staff about six months ago, and asked
the commission to expedite its response. The center would be one of more
than a dozen nationwide.
    If the use of the funds is not approved, "the business case for the
CyberCenter will collapse, and Qwest cannot make this investment," attorneys
for Qwest wrote.
    Armenta also said a CyberCenter of this size could be important in New
Mexico's bid to lure the Air Force Cyber Command - a goal of Gov. Bill
Richardson.
    But the New Mexico Department of Information Technology said the
CyberCenter proposal does not fall under the SASA limitations or goals of
network improvement.
    "The SASA funds are not designed as a substitute or subsidy for a
business case for building of (a) Qwest CyberCenter," the department said.
"They are designed to make up for Qwest's previous failures to invest in its
telecommunications network.
    "The CyberCenters themselves, while no doubt useful and beneficial to
Qwest, do not improve the New Mexico telecommunications network."
    The department also noted two similar Albuquerque businesses, Big Byte
and Oso Grande, that operate data storage and computer equipment collocation
centers.
    PRC staff, noting the reservations of the Department of Information
Technology, asked the PRC to deny Qwest's requests for a quick decision and
instead schedule hearings and request more evidence the project would fall
under the SASA guidelines.

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