Calling to Collect

The City of Denver declares war on the state legislature over a telephone bill.

But Reynolds isn't convinced. She says the city has the right to collect rent, not just recover costs, from companies who are making money off public rights-of-way. "When people use your property, you should be able to get a fee for that," Reynolds says.

That's the crux of the larger legal issue. And the Colorado court battle will likely serve as a national test case. "This is the big stone dropped in the middle of the lake," predicts Don Eberle, a Denver-based attorney for MCI. "The ripples will be felt far and wide."

MCI and its competitors argue that if cities are allowed to impose additional fees, phone companies will simply pass the costs onto customers, levying what would amount to a new tax. But Geoff Wilson, an attorney for the Colorado Municipal League, says the companies are "wrapping themselves in the mantle of consumer protection" when what they really want is to get something for nothing. He compares the phone lobby's rhetoric to past efforts by railroads to get public lands for rail lines without paying for them. "This is just the railroads, take two," Wilson says. "These are not indigent plaintiffs."

Indeed, a coalition that's been organized to defeat the charter amendment includes such phone giants as US West, MCI, AT&T and Sprint, with US West and AT&T each ponying up $25,000 for the cause. The companies have hired politically connected lobbyist Mary Buckley of Brownstein Hyatt Farber & Strickland, the big kahuna of power politics in Colorado, to coordinate the campaign.

One of the coalition's principal arguments is that if the city prevails, smaller phone companies will think twice about competing with US West. "If a smaller company is thinking about getting into Denver and Denver passes this, Denver moves down the list," says Eberle. He says MCI wants to get into every market in the state for local service, but as the largest market in Colorado, Denver makes sense as a place to start, and city officials know it. Eberle says the city is taking advantage of that position. "If you want to be the troll at the bridge," Eberle says, "Denver's a good place to be."

Meanwhile, city officials express dismay that CoPIRG, which rarely agrees with the state's phone companies on anything, has adopted the industry's party line on the issue. "I don't feel that CoPIRG, with all due respect, fully understands our position," says Smits.

But Malick says his group understands just fine. Competition, he says, is the only way phone rates will ever start to come down. And the fee at the center of the November 4 vote is just another obstacle to getting more companies in the game. Denver can manage with its current tax structure, says Malick. "Competition is never going to get started if we keep putting up these roadblocks."

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