Qwest petitions FCC for $4.2B in USF funds to defray broadband infrastructure costs

The Denver Business Journal reports Denver-based telco Qwest has filed a petition with the Federal Communications Commission seeking $4.2 billion from the Universal Service Fund to defray the cost of deploying broadband infrastructure in its 14-state service area located in the western United States.

According to the newspaper, current FCC rules make the funds inaccessbile to Qwest.

Qwest questions future growth path of wireless broadband

Wireless broadband is seen as a much needed "third pipe" to deliver broadband in areas where wireline-based broadband is scarce or nonexistent. For example, in the vast western U.S. service area of Denver-based telco Qwest.

However, Qwest Chief Technology Officer Pieter Poll doesn't believe wireless can deliver sufficient capacity in the future as bandwidth demand grows. Instead, he suggests its role is that of an interim technology. Here's what he had to say on the topic in an interview with Telephony Online:

If you look at the calculation of what wireless networks can provide in terms of bandwidth, it’s a bit-per-second-per-hertz argument, first of all--the efficiency of how you use spectrum. But ultimately [it’s] finite spectrum. With a number of users. As you build networks, there’s a natural density of cells or reuse that you can get to. I don’t see wireless networks replacing wired broadband networks the way people are thinking about future wired broadband networks. Don’t get me wrong; I’m very excited about what wireless broadband offers today and will offer in the future. But I think it has its appropriate place for the reuse and speed offered. When we start thinking about things we can do in the home with extreme speeds, those are things you will not be able to realistically do over wireless networks, at least at any cost point that an operator would consider feasible.

Qwest bullish on residential broadband, plans $1.8B FTTN deployment

Dow Jones reports today that Denver-based telco Qwest Communications International plans to spend $1.8 billion to build fiber to the node (FTTN) infrastructure serving 1.5 million homes in its top 23 markets.

Qwest joins AT&T in adopting the lower cost FTTN fiber/copper hybrid architecture, which AT&T is deploying as Project Lightspeed in selected areas to support its triple play IPTV video/Internet/voice bundle marketed under the brand name U-Verse.

By contrast, the nation's second largest telco, Verizon, has opted for a costlier Fiber To the Home (FTTN) architecture that offers residential customers higher throughput speeds, greater potential for expanded service offerings, and reduced risk of technological obsolescence.

Qwest estimates the FTTN deployment will run about $175 per home -- far less than FTTH. Qwest says about 60 percent of its upgraded homes will have speeds up to 7 Mbs.

Qwest abandons IPTV in Colorado

Qwest, the former Baby Bell US West spun off from AT&T two decades ago, has abandoned plans to deploy Internet Protocol TV in Colorado next year. At the same time, the Denver Post reports, Qwest has shelved lobbying efforts like those pursued by AT&T in its 22-state operating territory to get a statewide video franchise bill enacted preempting local governments and their irksome demands that telcos deploying advanced telecommunications services including video service to compete with cable be available to everyone and not just selected neighborhoods.

The build out issue apparently figured into Qwest's decision:

Ken Fellman, former mayor of Arvada and a local communications lawyer, said he respects the company's decision to back off of its video plans. Fellman has asked that Qwest be required to offer video services to all members of a city or town, not certain select neighborhoods.

"It was a concern that Qwest didn't have the financial resources to widely deploy service," said Fellman, who also represents the Greater Metro Telecommunications Consortium. "We would have ended up with pockets of competition. Perhaps in some ways, (Qwest CEO Ed) Mueller came to a similar conclusion."

Revamp wireless USF charge to subsidize wireline broadband, Qwest reportedly urges FCC

The Denver Post reports Colorado-based telco Qwest wants the Federal Communications Commission to change the formula for wireless phone surcharges for the Universal Service Fund (USF).

Qwest is proposing that the wireless surcharge be applied on a per household rather than per customer basis. The difference between the two methods is estimated to be around $500 million, which Qwest says should be set aside to subsidize wireline broadband deployment.

More telco baloney courtesy of Qwest

Telco Qwest is having a fit over local Colorado governments that want it to tell them where and when it plans to build upgraded broadband infrastructure to enable it to offer Internet Protocol TV.

The Denver-based telco complains that doing so is divulging trade secrets and would tip off competing cable companies of its plans.

Baloney! Markets are made by what is actually offered, not what is planned. The real issue is all about buildout. All too often, the telco/cable duopoly wants to put in place incomplete systems that leave entire neighborhoods without access to advanced broadband services. Local governments are right to demand providers serve all of their residents and not leave gaping broadband black holes.

The telco video challenge: 25Mbs or bust

Here's an interview in the DesMoines Register with Qwest's Iowa President Max Phillips. It shows while telcos like Qwest desire to get into offering video programming like cable companies and push for state statutes easing the way into the market, they face a daunting technological challenge doing that over existing copper cable pair that was originally designed to carry analog voice signals and not huge amounts of digital data.

"We offer up to seven megabits in Des Moines. You've probably got to get those speeds up somewhere in the 25-megabit range to make this product work," Phillips tells the newspaper.

Getting that kind of throughput on a reliable level in order to support video appears to be a major reach, particularly when much of the telcos' existing copper cable plant can provide only 1.5 Mbs DSL service tops -- and in many areas can't provide DSL at any speed.

Telco's sluggish DSL deployment produces IPTV skepticism

Denver based telco Qwest wants to deploy broadband-based Internet Protocol TV in Broomfield, Colorado. But it's getting a less than welcome reception from local leaders unimpressed with the telco's slow, selective rollout of digital subscriber line (DSL) and who are concerned of a repeat performance with IPTV that would leave some neighborhoods without service.

This goes to the crux of why telcos and some cable companies have backed state legislation preempting local governments and putting the state in charge of issuing broadband "video franchises." The legislation typically allows franchisees to build out their systems to serve half or less of their service areas, leaving everyone else on the wrong side of the digital divide. Local elected leaders are more sensitive to this digital redlining than state legislators, who are often the recipients of campaign contributions from telco and cable company sources.

It's only natural: U.S. Supreme Court rejects anti-trust action targeting big telcos

Bloomberg reports the U.S. Supreme Court today tossed out a lawsuit alleging telcos Verizon, AT&T Inc. and Qwest violated anti-trust law by colluding not to compete in each other's service areas.

The high court found there was no evidence of collusion. Rather, the justices ruled 7-2, the fact that the former baby bells hardly ever directly compete is a natural consequence of their business models. "There is no reason to infer that the companies had agreed among themselves to do what was only natural anyway," Justice David Souter wrote for the court.

Colorado video franchise fight reveals true goal of provider "competition," Comcast's hypocrisy

Here's an interesting story from the Rocky Mountain News that illustrates what the real competition between cable companies and telcos is all about. It's not about which can capture the most customers in a given market -- the traditional measure of market competition -- but rather who can force the other guy to provide service to everyone in a given local government jurisdiction.

Cable provider Comcast insists Denver-based telco Qwest be required to provide broadband video service to everyone in the Colorado municipalities it wants to serve, charging Qwest will leave some neighborhoods unserved if local governments don't require it to do so in exchange for granting Qwest a video franchise. (Note however, hypocritical Comcast does exactly what it accuses Qwest of doing, including in my own El Dorado County, California ZIP code where Comcast serves some neighborhoods but refuses to serve others).

If Colorado local governments force Qwest to serve their entire jurisdictions, the Rocky Mountain News reports Qwest may counter by invoking a recently promulgated Federal Communications Commission rule that Qwest sought prohibiting local governments from imposing "unreasonable" build out requirements on telephone companies seeking franchises to offer enhanced broadband-based video services. The rule also requires local governments to make a decision on a video franchise application within 90 days.

If Qwest presses ahead with this reported effort to accelerate local government video franchise applications, it will set the stage for litigation over the meaning of what constitutes an "unreasonable" build out requirement under the FCC rule. Local governments have already gone to federal court to challenge the rule, contending the FCC overstepped its authority.

Qwest's initiative also marks a quick reversal of a strategy announced earlier this month by CEO Richard Notebaert, who told Bloomberg Qwest planned to hold off offering video over phone lines, concentrating instead on accelerating residential broadband Internet access.

Qwest holds off IPTV in favor of residential high speed Internet access

Qwest CEO Richard Notebaert tells Bloomberg his company is holding off offering video over phone lines, concentrating instead on accelerating residential broadband Internet access.

It's a wise move on Notebaert's part. Residential customers need high speed Internet access first and foremost. Telcos like Qwest should be prioritizing it and speeding deployment considering they didn’t offer DSL in more than 20 percent of their service areas as of mid 2006, according to the Federal Communications Commission.

If and when Qwest wants to offer wire line-based TV service, it would be well advised to follow Verizon and utilize fiber optic cable rather than a hybrid fiber/copper play in the early stages of deployment by AT&T, dubbed Project U-Verse.

High definition TV itself needs about 9Mbs. Getting that much data over twisted copper pair that comprise the last segment of U-Verse that was originally designed to provide plain old telephone service (POTS) packaged with telephone and high speed Internet service could well prove problematic. Notebaert is in a position to watch it fail on someone's else's dime instead of investing his own shareholders' money.