A federal court in Ind. ruled that Verizon sought unreasonable lo...

$655,000 in compensatory damages. Last year, in doing soil borings for a construction project, Patriot cut a main fiber cable carrying 624 DS-3 circuits. Verizon quickly rerouted most affected circuits; service disruption was minimal, and repairs were completed about 8 hours after the accident. Verizon sued Patriot for $21,900 in direct repair costs plus $633,600 for loss of use, citing Ind. law. The Bell based its compensation claim on the cost of renting temporary circuits for 8 hours, with Level 3 Communications’ tariffs as the reference, though Verizon didn’t have to buy the capacity. That came to $9,600. Then it added a $1,000 tariffed nonrecurring installation fee for each DS-3 circuit, another $624,000. The court said the last sum outran reason (Case 1:06-CV- 00945-DFH-JMS). It said it would be “unfair and even absurd” to use one-time fees for leases lasting a year or more to set a hypothetical value for an 8-hour loss of use, especially since there’s no established retail market for very brief telecom transmission capacity. The court declined to dismiss the case, though, and said that while Verizon may be entitled to loss-of-use compensation, it isn’t entitled to claim the $624,000 in installation charges. It suggested that if Verizon wants a hypothetical installation cost added to its hypothetical rental cost, it prorate the $624,000 tally to the 8-hour length of the loss.