Qwest Communications has filed suit against the Utah Telecommunications Open Infrastructure Agency (UTOPIA), claiming the multi-city municipal fiber project uses Qwest telephone poles without permission and competes unfairly by avoiding the need to pay sales and property tax.

The lawsuit was filed in a federal district court in Salt Lake City Wednesday.

The suit also names the town of Riverton, Utah, as a defendant, claiming the UTOPIA member violated the Telecom Act of 1996 by requiring developers to provide an underground conduit for UTOPIA's fiber. "This underground conduit is placed at the developer's expense but is deemed to belong to the city," the Qwest complaint said. "The [Telecom Act] does not allow local governments to impose legal requirements that are competitively non-neutral and discriminatory."

The suit also accuses Qwest of "reckless construction practices," including "negligently cut[ting] Qwest cables" and service wires on several occasions. Most notably, the complaint alleged, UTOPIA caused multiple cable cuts late last month that resulted in widespread loss of service in Murray City, Utah, incurring damages Qwest expects to be at least $400,000. UTOPIA's utility pole installations also fail to meet industry standards, causing safety hazards, the complaint said. A Qwest spokesman identified safety issues as one of the main reasons Qwest filed the suit.

According to Qwest's complaint, Utah state law stipulates, "When a municipality provides to its inhabitants cable television services, public telecommunications services or both and competes with private providers whose activities are regulated by the municipality, the municipality does not discriminate against competing providers of the same services."

"Only those companies that are willing and able to negotiate an agreement with UTOPIA are permitted to reap the benefits of UTOPIA's distinct financial advantages," Qwest's complaint said. The complaint called for UTOPIA to be barred from offering services at what it called "below-market prices," either paying sales and property tax or imputing those costs into its prices, as bills in other states have suggested.

"If [Qwest] want[s] to sue over that issue, UTOPIA's the wrong entity to sue," said Ben Gould, vice president and chief marketing officer for DynamicCity, the consultants that helped guide UTOPIA. "UTOPIA's not the tax collector. [Qwest] should sue the state, maybe. The service providers [that use UTOPIA's network] have to pay the same taxes [as Qwest]."

Furthermore, Gould said, Qwest has been invited to provide services over UTOPIA's network, which is offered on a wholesale basis to service providers such as AT&T, but Qwest has declined.

And Qwest's accusation that UTOPIA uses its wholesale network unfairly strikes Gould as hypocritical. "They've had a protected monopoly for a long time," he said. "They have fought to not have to provide wholesale services to the CLECs." Unlike Qwest, though, UTOPIA doesn't compete for retail customers with the same entities that are forced to rely on it as a supplier of access infrastructure, he said.

"There's no basis for unfair competition," Gould said. "[Qwest's suit] is just another attempt to protect a monopoly."