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Jury: Qwest must pay AT&T $350M

Updated:
AUSTIN, Texas (AP) — Telecommunications carrier Qwest Communications International Inc. was ordered by a jury to pay AT&T Corp. more than $350 million for repeatedly cutting a fiber-optic phone line.

The award — which could be reduced or overturned by the trial judge or on appeal — equals roughly three-fourths of Qwest's 1999 profit.

``We tried to send a message,'' said juror Sherry McGraw. ``The only way to do that was to make the stockholders feel it in the bottom line.''

A Qwest spokesman said the company likely would appeal.

AT&T charged that Denver-based Qwest was negligent in cutting an AT&T line that connects Austin and San Antonio in September, November and December 1997. Each time, AT&T's service was disrupted for more than three hours, although most customers were rerouted automatically to other parts of the network and didn't lose service.

On Monday, the Travis County jury awarded AT&T $1.2 million in actual damages, and on Tuesday added $350 million for punitive damages.

``I've never seen a judgment like this,'' Tavis McCourt, an analyst who covers Qwest for Morgan Keegan & Co., told the Austin American-Statesman. ``It's not unique that a fiber line gets cut. It's unique it gets to jury and gets this far down the road.''

Denver-based Qwest, the nation's fourth-largest long-distance carrier after acquiring U S West and a growing player in the Internet-access market, immediately attacked the jury award.

``We believe the verdict in this case will not only be appealed but knocked down,'' said Qwest spokesman Matt Barkett. He said the award violates a Texas statute that caps punitive damages.

Texas law generally limits those awards to about twice the amount of actual damages.

Joe Latting, a lawyer who represented AT&T, said AT&T tried to settle the case before trial, ``but we couldn't get any significant offers from Qwest.''

On Wednesday, Qwest shares were unchanged at $42.19 on the New York Stock Exchange, where shares of AT&T were off 18.7 cents to close at $20.69.
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