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Despite pioneering in the IPTV field, latter day Qwest wasn't much on the idea of getting into the TV business, repeatedly insisting
they supported the idea of an "over the top" solution. Granted that was partially because Qwest spent the last few years shopping itself around, and made debt reduction its first priority. In contrast, new Qwest owner CenturyLink offers an IPTV service dubbed Prism
, but only in select markets. Speaking on a company conference call, CenuturyLink today stated Qwest customers shouldn't expect IPTV service anytime soon
, as the company's primary plan in Qwest markets will be to slow and reverse Qwest customer erosion to cable companies and CLECs.
"We are getting more local -- competing with the CLECs and cable companies who have been taking market share from Qwest," Puckett said. As for rolling out IPTV to former Qwest markets, those decisions will take more time and be influenced by the cost of pushing fiber closer to customers, Post said. Prism TV will pass 1 million homes by the end of the year elsewhere in CenturyLink-land. "We do not expect any additional IPTV rollouts in new markets," he said.
While extending fiber further is costly and takes time, companies like Qwest are losing subscribers to cable because the cable triple play is luring customers away from DSL with faster broadband speeds. Offering discount DSL instead of getting the network upgraded to next-generation services will only help up to a point, and any telco planning to nurse rotting copper for the next decade (Frontier comes to mind) has an uncertain trajectory at best if they face cable competition. CenuturyLink recently indicated they plan to phase out the Qwest brand completely
With their planned acquisition of Qwest approved and official
, CenturyLink is now going about the task of killing off the Qwest brand completely, according to the Denver Post
. As we noted back in April
, employee chatter had been all along that the Qwest brand would die off -- though there had been talk that the Qwest brand would be retained for some services. The CenturyLink brand is a blank slate in the mind of many consumers and the media, most of whom haven't even caught up to the fact that CenturyTel changed their name to CenturyLink after their acquisition of Embarq in 2009
. The "Qwest is becoming Century Link" transition message is being sent to attendees of major ball parks, and most Qwest branding will be eliminated completely by early August.
Last week the FCC gave their approval
for the merger between Qwest and CenturyLink, requiring that the merged company deliver broadband service at speeds of at least 4 Mbps to an additional 4 million households, double the number of current homes that can get 12 Mbps broadband, and triple the number that can get 40 Mbps broadband (not a large number to begin with). With the FCC's approval in the bag, that only left regulators in the state of Utah -- and they formally gave their approval yesterday. According to a CenturyLink press release
, the two companies expect the deal to formally close on April 1.
The FCC has given their approval
(pdf) of CenturyLink's merger with Qwest. The FCC has imposed several conditions the agency insists will mitigate "the risk of harm to competition," including offering $10 broadband and $150 computers to low income households. The freshly-merged company must also deliver broadband service at speeds of at least 4 Mbps to an additional 4 million households, double the number of current homes that can get 12 Mbps broadband, and triple the number that can get 40 Mbps broadband. The timeline on these requirements isn't specified, but the majority of such requirements are usually things the companies involved had planned to do anyway. CenturyLink of course was only just recently formed after the merger between Sprint spinoff Embarq and CenturyTel.
According to the Minneapolis Star Tribune
, The Minnesota Public Utilities Commission (PUC) has postponed their approval of CenturyLink's planned acquisition of Qwest until March, citing concerns about whether the $10.6 billion merger is in the best interest of the public. It's incredibly unlikely the deal will be rejected, but in an age where even the most massive telecom mergers are rubber stamped with minimal conditions -- even a small delay is unexpected. "Running Qwest is a unique experience, and it is beyond anything CenturyLink has faced to date," Commissioner J. Dennis O'Brien noted. "There was no evidence that the acquisition agreement meets the public interest." The $22 billion deal
is seeing significant opposition from small ISPs, who want broader, guaranteed access to the merged network.
Qwest and CenturyLink's $22.4 billion union
continues to move forward, the companies last month gaining regulatory approval from Arizona, Colorado and Utah regulators. In Colorado, the companies agreed to a condition that in order to get deal approval, they'd need to invest $70 million in the state over the next five years. This week, the two companies got Washington State's Attorney General to sign off on the deal, an announcement
from the Washington AG stating the two companies agreed to invest a minimum of $80 million in broadband infrastructure in Washington over the next five years. The agreement also involved various rate hikes, and an obligation requiring the new company adhere to previous "price for life" broadband promises.
Qwest has repeatedly stated
that they wouldn't be getting into the IPTV game, instead relying on "over the top" video solutions (they invested $10 million in ZillionTV before it exploded
). Part of the reason they avoided IPTV was because they couldn't afford it; unlike Verizon and AT&T, Qwest lacks the ability to cross-subsidize such a build out with wireless revenues.
Many Wall Street analysts have complained about network upgrades
of any kind, given they're usually in the business of immediate returns -- not establishing long-term survivability for the companies invested in. Though as you watch telcos lose legacy DSL customers in droves
to faster cable in markets they didn't upgrade, you wonder just what would have happened if they listened to Wall Street's advice.
Minneapolis and St. Paul local paper The Star Tribune
this week was shocked to learn that the two cities are the eighth and first fastest U.S.
Shareholders of both Qwest and CenturyLink have approved
the latter's acquisition of the former, a $22 billion deal that was announced back in April
. CenturyLink was formed not that long ago by a merger of Embarq (a Sprint spinoff) and CenturyTel. This new, even larger CenturyLink -- once Qwest is integrated -- will offer service in 37 states, and the new combined business will serve approximately 5 million broadband customers, 17 million access lines, 1,415,000 video subscribers and 850,000 wireless consumers. The deal has already seen approval by the USDOJ, but is still awaiting inevitable approval by 14 States, DC, and the FCC. Ma Humpty Bell continues to slowly but surely pull herself back together again.
In an attempt to beat back cable rivals, Qwest has launched a new marketing effort that promotes their DSL service and bundles under the "Heavy Duty DSL
" brand. Note that technically this is the same service Qwest has been offering, albeit with a new brand and a few new promotional twists.
As we mentioned last week
when CenturyLink and Qwest's $23 billion deal was announced -- there's a lot of questions to be asked about a company that's growing so incredibly quickly (CenuturyLink only just merged with Embarq last year), has no wireless division to prop up revenues, and is trying to be a next-gen broadband company using last mile copper. Consumer advocates are always wary of consolidation for consolidation's sake -- but investors also appear to be nervous about regulatory attention, growing too quickly and integration
Wall Street has begun to raise concerns that CenturyTel is growing too aggressively, as it just recently completed another large acquisition of Embarq less than a year ago.
As we mentioned yesterday
, Qwest and CenturyLink have announced a merger valued at around $23.4 billion dollars (half of that being Qwest debt). As we also mentioned, neither company has a wireless division that will help them mitigate landline defections or help pay for necessary upgrades for the outdated last-mile copper infrastructure serving most of their residential customers.
It looks like Qwest has finally found their suitor. CenturyLink and Qwest announced this morning
that CenturyLink will acquire Qwest in a tax-free, stock-for-stock transaction worth about $10.5 billion.
Qwest for years has sent their lawyers after communities who, unhappy with Qwest service, wanted to deploy their own broadband. They've fought against Seattle's attempt to deploy fiber, and in Utah Qwest sued the Utopia
FTTH project in an effort to prevent them from using regional utility poles.
Last month we reported
that Qwest had joined a relatively new trend among broadband carriers: making users pay Qwest -- so they can pay Qwest. The company recently implemented a new $4 fee for users who want to pay their Qwest bill by phone, and a new $1 bill for those who'd like to pay their Qwest bill via credit card at the official Qwest website.
Qwest Communications today met with financial analysts today in slushy midtown Manhattan
to discuss the company's future plans, including an expansion of the company's fiber to the node (VDSL) deployments. Qwest informed analysts in attendance that the company plans to reduce debt by 25% in the next twelve months (surely their new "convenience fees
" will help there), as the company continues to clean up their financials for a possible sale
Users in our Qwest forum
note that the baby bell has started hitting users with a new, $1 "convenience fee," should they try to make a one-off payment of their bill at the Qwest website, or $4 should they try to pay their bill by phone. A Qwest FAQ entry
doesn't really explain why
users need to pay the fee, which Qwest notes you can avoid by mailing a check, signing up for Qwest's autopay service, or by using your banks electronic payment service.
Qwest has repeatedly stated
that they won't be getting into the IPTV game, instead relying on "over the top" video solutions for subscribers. Of course part of the reason they haven't gotten into IPTV is because they can't afford it; unlike Verizon and AT&T, Qwest lacks the ability to cross-subsidize such a build out with wireless revenues.
Yesterday we noted
how the FCC's "plan" to deliver 100 Mbps service to 100 million Americans (with no real time frame) was largely for show. As we noted, American cable operators already offer 100-Mbps capable DOCSIS 3.0 service to nearly 50 million Americans, and without including fiber deployments, the United States should pass the 100 Mbps to 100 million mark in a few years without the FCC ever lifting a finger.
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Recent news contributorsKarl Bode , telcodad