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Qwest Doesn't See The Point In FiOS
CEO: 'It's too expensive. We don't see the return.'

We're not sure how you turn "we lack the resources, will or vision to do anything particularly interesting or bold in our uncompetitive service areas" into a presentation that gets Wall Street excited, but as we mentioned Monday, Qwest has been trying to do that all week. New CEO Edward Mueller has been meeting with analysts and the media since Monday, but judging from this CNET interview, the baby bell boss isn't actually telling them anything new or particularly interesting. Here's one edge-of-your-seat excerpt:

quote:
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CNET:Why doesn't Qwest follow Verizon's lead and just take fiber to the home?

Mueller: It's too expensive. We don't see the return.

CNET:But Wall Street seems to have looked favorably on Verizon's strategy, and it's starting to pay off. They seem to have a long-term vision.

Mueller: We don't have the resources.

CNET: Aren't you worried about commoditizing your network by not offering services like TV?

Mueller: No, that is what we have DirecTV for.

CNET:Yes, but you are relying on another company to offer a service to your customers. And you are just providing the transport.

Mueller: We like them.


How could anyone not be excited from that exchange? A rehash of the company's very limited 20Mbps VDSL plans, a vague mention of wireless broadband aspirations, and the announcement that Qwest would be offering a "Geek Squad" style tech support service were about as exciting as it got this week for analysts. In fact the only real news of the week (that Qwest will likely dump Sprint for Verizon) came from Verizon's CEO, not Qwest's.

We're hearing that Qwest should have some additional FTTH/VDSL deployment news in the next month or two (specific launch markets, most likely). Still, one gets the feeling the company is sort of drifting in neutral, making the minimum effort required and paying off debt until someone comes along to buy them out.
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pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Cable Competition in Qwest Territory?

Verizon was driven to deploy FIOS by the rabid competition it faced from cable TV companies that operate in their service area. Something tells me that Qwest is either not feeling any competitive pressures from cable companies operating in its service area, or is choosing to ignore it.

JasonD
@comcast.net

JasonD

Anon

Re: Cable Competition in Qwest Territory?

Of course they've got competition from cable. But thankfully for the players involved, duopolies usually don't spark heated service/price wars. Plus when Comcast (among others) charge $70~$80mo for their higher tiers, it really doesn't change the landscape much. Quest is playing it smart.

pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Cable Competition in Qwest Territory?

said by JasonD :

But thankfully for the players involved, duopolies usually don't spark heated service/price wars.
But what happened with Verizon and FIOS disproves this. In many Verizon service areas where DSL wasn't available, the cable companies were literally killing Verizon... until Verizon deployed FIOS. So there was at least competition related to service.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt to pnh102

Premium Member

to pnh102
comcast serves most cites, suburbs, and a good deal of the semi rural area in Qwest territory.
He's right they no longer have the resources, little cash, less available credit.
Their Broadband slogan: "Qwest, doing absolutely nothing, at the speed of light" only works for captive areas (large NW cities, formerly at&t/USWest), and captive stockholders. (those that held on too long, or believe a white knight will buy them out)
They have no wireless (about to "partner" with verizon) no TV (partnered with dTV) ageing copper plant. Stock price is 10% of what it was in 2000, and market cap is under $10B.


pnh102
Reptiles Are Cuddly And Pretty
Premium Member
join:2002-05-02
Mount Airy, MD

pnh102

Premium Member

Re: Cable Competition in Qwest Territory?

said by tshirt:

comcast serves most cites, suburbs, and a good deal of the semi rural area in Qwest territory.
There are some major cities in Qwest territory, just like there are in Verizon territory. FIOS for the most part is an urban/suburban thing. While I can understand Qwest not wanting to string fiber in rural areas, why can't they do anything in their urban/suburban areas?

minidu
Premium Member
join:2002-09-28
Cheboygan, MI

minidu

Premium Member

Re: Cable Competition in Qwest Territory?

said by tshirt:

While I can understand Qwest not wanting to string fiber in rural areas, why can't they do anything in their urban/suburban areas?
Because is some states they service like Colorado the law says they have to provide it to everyone, or no one. So if they start stringing fiber they have to do fiber to every one.

dispatcher21
911 Where is your emergency?
join:2004-01-22
united state

dispatcher21 to tshirt

Member

to tshirt
I thought they were already partnered with Sprint for cell service?

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

1 edit

tshirt

Premium Member

Re: Cable Competition in Qwest Territory?

"Qwest already resells wireless service from Sprint Nextel. But Mueller said this partnership is not working well for Qwest, and the company is looking to either renegotiate its deal with Sprint or find another company with which to partner in wireless.

"
recieved a newsletter today saying Verizon is the likely new choice, negotations in progress.
These "resell to fill out the line up" deals rarely provide much net profit/revenue to the reseller. Their benifit is to offer a full service package, and they may receive a couple bucks off the top of the full price package. In return the absorb billing, tech support, and much of the advertizing costs, sometimes leaving a net loss for the service, but maybe bringing in/keeping a few more subscribers.
mdrift
join:2003-08-15
Spokane, WA

mdrift to pnh102

Member

to pnh102
said by pnh102:

Verizon was driven to deploy FIOS by the rabid competition it faced from cable TV companies that operate in their service area. Something tells me that Qwest is either not feeling any competitive pressures from cable companies operating in its service area, or is choosing to ignore it.
Qwest is in Spokane. Comcast is the only Cable Provider to consumers. DirecTV and DISH Network are the direct competitors to Comcast on TV Services.

I bundle Qwest ADSL with DirecTV. Qwest manages the bill.

It's rather straight forward and works.

rudnicke
Premium Member
join:2004-10-23
Rantoul, IL

1 recommendation

rudnicke

Premium Member

Wow...

That guy really sounds dumb.

Subaru
1-3-2-4
Premium Member
join:2001-05-31
Greenwich, CT

Subaru

Premium Member

Re: Wow...

agree the dumbest thing i've heard in awhile...

battleop
join:2005-09-28
00000

battleop to rudnicke

Member

to rudnicke
Dumb would be spending money you don't have on something you won't get a return quick enough to stay a float.

EG
The wings of love
Premium Member
join:2006-11-18
Union, NJ

EG to rudnicke

Premium Member

to rudnicke
said by rudnicke:

That guy really sounds dumb.
Dumb ?

He is laughing all the way to the bank with his CEO salary...

supergirl
join:2007-03-20
Pensacola, FL

supergirl to rudnicke

Member

to rudnicke
said by rudnicke:

That guy really sounds dumb.
Good God, who hired this idiot! No executives must've wanted to work at Qworst. I'm sure that exec. search was a very short list. This moron or that moron?

Qwest is mostly rural I thought so I doubt FIOS would be a good investment. Qwest is eventually not going to be around. Even Embarq is a better than Qwest. So is Alltel's spinoff.

Other than VZ FIOS, I don't see the return on getting into the TV biz in the first place. UVerse is never going to be that great. Only VZ Fios will be able to compete with the Cable Cos.
Underplay
join:2003-10-19
Tacoma, WA

Underplay

Member

There done for.

There business strategie is too damn boring. Hopefully someone will buyout this crappy company and replace the infrastructure to support higher speeds, FIOS?

plk
Premium Member
join:2002-04-20
united state

1 edit

plk

Premium Member

Re: There done for.

I agree. This guy is a fool or he's waiting to be bought. However, I doubt any other big Bell would be interested.

If they don't have the cash, sell off a few states to regional providers and use the cash to innovate. Even one town at a time ftth?

One has to wonder how much they can write off in a bankruptcy?

My question would have been. "You have FTTH so some small areas. What the logic behind 5 meg caps"?
Underplay
join:2003-10-19
Tacoma, WA

Underplay

Member

You know whats funny, I live in Pullman, WA a college town near the Idaho border. There is such a small market for internet, however, the local provider upgraded there backbone to fiber optics LAST YEAR.

If a locally owned ISP is upgrading to fiber, I think a big corporation can do the same.
bogey7806
join:2004-03-19
Here

bogey7806

Member

Re: There done for.

I'm certain Qwest and all the baby bell ISPs upgraded to a fiber backbone long long ago.
hidden72
join:2008-01-21
Kaysville, UT

hidden72

Member

Re: There done for.

Not really. There are thousands upon thousands of 256k and 1.5mbps users who can't get better DSL speeds because they are running off of a copper-fed remote terminal. No fiber anywhere to be seen.

If those Remote Terminals were fiber-fed, 7mbps and higher speeds would be possible. The copper is the bottleneck.
bogey7806
join:2004-03-19
Here

bogey7806

Member

Re: There done for.

I don't think you realize what "backbone" means.
hidden72
join:2008-01-21
Kaysville, UT

hidden72

Member

Re: There done for.

If you take a simplistic approach, the backbone is any part of the network that carries more than 1 user's traffic. In a DSL network, that delineation occurs at the DSLAM. The link from the RT to my house is just my own traffic, hardly considered a backbone. However, the link from the RT to the CO carries hundreds of user's traffic back to the CO. That is a backbone link.

If you want to play the game of semantics, we could use proper terms such as backbone, core, distribution, aggregation, edge, etc, but for the purposes of this conversation the copper "backbone" that feeds the remote terminals is a bottleneck that needs to go away.
bogey7806
join:2004-03-19
Here

bogey7806

Member

Re: There done for.

»en.wikipedia.org/wiki/Ba ··· tions%29

»en.wikipedia.org/wiki/Ba ··· _network

There's a succinct difference between the terms. I wouldn't call RT to the CO a backbone as there's a very significant heirarchy difference between the two.

And getting back to the original assertion, Qwest and AT&T are running fiber for backhaul. That's the whole point.
viperlmw
Premium Member
join:2005-01-25

viperlmw to Underplay

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to Underplay
Isn't Pullman in Verizon territory, like Moscow? Verizon has had fiber into there for several years, maybe close to 10? They also have digital microwave into the area. Qwest and Verizon have a radio site on the same butte, and Verizon's fiber goes right by there.
Underplay
join:2003-10-19
Tacoma, WA

Underplay

Member

Re: There done for.

Yes Pullman is Verizon territory, however, we are stuck with crappy DSL copper lines, and no FIOS. The closest we thing we have to speed in compared to FIOS would be roadrunner/timewarner which has a package of 10mb now.
bogey7806
join:2004-03-19
Here

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bogey7806 to Underplay

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to Underplay
Just think for a second. The one player that is deploying a FTTH service in any massive scale anywhere in America is getting rid of 3 states which are about as densely populated as the average Qwest state and you really.... honestly believe that what you just said would ever come to pass?

JasonD
@comcast.net

JasonD

Anon

Amen Mueller!

At least he's telling it like it is. Fiber is too expensive and not necessary for for the foreseeable future's internet experience. Yes, for IPTV fiber would be necessary, but not for straight internet.

Just keep adding and improving DSL technologies, that's where the working assets are (copper) and will provide the greatest returns. And keep farming out the TV offerings- little risk, guaranteed return.

Jim Kirk
Premium Member
join:2005-12-09
49985

Jim Kirk

Premium Member

Re: Amen Mueller!

LOL! Seriously?
openbox9
Premium Member
join:2004-01-26
71144

openbox9

Premium Member

Re: Amen Mueller!

For a lot of Qwest's markets, I'd say Jason is spot on. The ROI isn't there and for the most part, consumers want to pay less money, more so than they want 50 Mbps service to their home.

ztmike
Mark for moderation
Premium Member
join:2001-08-02
La Porte, IN

ztmike to JasonD

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to JasonD
said by JasonD :

At least he's telling it like it is. Fiber is too expensive and not necessary for for the foreseeable future's internet experience. Yes, for IPTV fiber would be necessary, but not for straight internet.

Just keep adding and improving DSL technologies, that's where the working assets are (copper) and will provide the greatest returns. And keep farming out the TV offerings- little risk, guaranteed return.
Your joking right? Copper is a dieing brand and these companys milking it out into the future will only have to update their infrastructure sooner or later.

EG
The wings of love
Premium Member
join:2006-11-18
Union, NJ

EG

Premium Member

Re: Amen Mueller!

said by ztmike:

Your joking right? Copper is a dieing brand and these companys milking it out into the future will only have to update their infrastructure sooner or later.
Saying the word "copper" is a generalization.

Even a FiOS connection terminates using forms of copper.

XBL2009
------
join:2001-01-03
Chicago, IL

XBL2009 to JasonD

Member

to JasonD
Great so why replace that 100 year old copper with new fiber that will last for 100 years when you can just stagnate with copper for another 50 years.

Typical American attitude....no vision or imagination.

••••••••
BosstonesOwn
join:2002-12-15
Wakefield, MA

BosstonesOwn to JasonD

Member

to JasonD
That is when the cable companies come in and eat your breakfast , bang your wife , and befriend your dog.

They need a future strategy. They will continue to leak customers until they can't keep up maintenance costs , then the systems will slowly fall apart leading to an even bigger exodus.

This guy is a moron if he thinks just because he has a monopoly , that he can't be dethroned. They have to at the very least start building fiber out closer to homes.

As a CEO this guys is a joke , you can still milk copper for money but , at&t has even realized that they need to build fiber further out to the customer. Adding more people to your service footprint can bring in more revenue. I mean really , is this guy surrounded by yes men constantly , no one wants to tell him how it is ? And what will happen once wimax and mobile broadband actually com up to snuff with countries like Japan ?

What people don't understand is that the web is growing leaps and bounds daily. Home spun content , and as much as people hat t piracy , are developing a huge hold on the worlds bandwidth. The new net experience is a nice quad core box sitting on your kids desk , while you and your wife are in the office and on the couch respectively. The kids watching youtube in HD while downloading some HD tv shows or music , your wife reading on a site listening to a little music. You vpned into work working with rather large files.

The new internet is like the old tv , the family will enjoy it , but not together. The needs of the family will exceed 25 meg easily.

••••••••••
gaforces (banned)
United We Stand, Divided We Fall
join:2002-04-07
Santa Cruz, CA

2 edits

gaforces (banned)

Member

Qwest Uverse?

"We're hearing that Qwest should have some additional FTTH/VDSL deployment news in the next month or two."

Yawn, yawn, ZZZzzzzzzZZzzzz, snore.

I can understand the reasons they cant deploy FTTH, but I have a conflict of interest
They can lay the fiber, then with VDSL they wouldnt have to upgrade infrastructure as much to support the higher speeds FTTH would require. Laying the fiber now is more cost effective than waiting, because it's not going to get any cheaper in the future.

••••••

DaveDude
No Fear
join:1999-09-01
New Jersey

DaveDude

Member

Ride the Light okay maybe not ?

Remember the commercial that Qwest was going to have every movie, every song available to you over fiber. Well i guess it was just a dream..

WeSRT4
join:2000-11-20
Mobile, AL

WeSRT4

Member

AT&T lite

So Qwest is AT&T lite for the most part?

Neither one of them have any vision for the future.
bogey7806
join:2004-03-19
Here

1 recommendation

bogey7806

Member

Re: AT&T lite

I wouldn't consider an LSD induced trip a very coherent vision.

How about this, how about they fund the project that makes most economic sense and not treat telephony in the same way that people treated sub-prime mortgages. "Oh don't worry about return or timeframes! It'll all pay for itself eventually so go ahead and get the 50yr mortgage!"

KrK
Heavy Artillery For The Little Guy
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join:2000-01-17
Tulsa, OK
Netgear WNDR3700v2
Zoom 5341J

KrK

Premium Member

Wow... talk about Innovation and future-proofing.... NOT

Anyone else think Qwest is going to get pwned by Cable and 3rd party offerings which DO include broadband, TV, and GASP VOIP phone services?

Wow, what a visionary CEO. "Let's just sit on our geographical monopoly." Problem is, IF they won't bring it, well, someone else will... or at least it will come to the highly profitable areas first, and Qwest will bleed the high end customers like crazy.

HMM. Seems his business plan is to sit back and milk the USF for all it's worth.

Sure, it's expensive to upgrade... but it's fatal to not do so.

••••••••••••

Nosuchname
@Level3.net

Nosuchname

Anon

Hah hah

Hah hah. Apart from asset sales, this is the same do nothing strategy that Notebaert has been selling for the last several years. The only difference is that Mueller isn't the two faced politician that Notebaert was. He has almost no public speaking skills and it shows everytime he opens his mouth. Notebaert could stab you in the back or sell BS by the truckload, all with a smile and smooth talk.

What's needed at Qwest is a senior management team with a realistic vision of where they need to go, ability to implement those goals, and some decent bench strength. Unfortunately, all of that is missing, along with some reasonably deep pockets to do much differently. Compare Boeing's bet the company gamble on the original 747 with Qwest's death by a thousand cuts. Until something changes, Qwest will continue to tread water.
dynodb
Premium Member
join:2004-04-21
Minneapolis, MN

1 recommendation

dynodb

Premium Member

You people are hilarious

You people crack me up. Rate of return? Capital spending? Increased debt load? WHO CARES WE WANT FTTH CHEAP SO DON'T BOTHER US WITH THE DETAILS!!!

Qwest isn't Verizon, and serves a much different territory- even Verizon is only deploying FTTH to about half their customers. Now try that in a more mountainous, sparcely populated region.

Verizon's FiOS take up rate is what- 15% after a year of having it available in an area? That would suggest that 85% of customers just aren't ready for it. Anyone who thinks that it would be a good financial move for Qwest to go another $20 billion in debt for a service that the vast majority of people (outside Internet board nerditry) don't need and aren't going to pay for isn't considering the big picture.

I wish Qwest was debt free, had boatloads of spare cash laying around and the demand for FTTH was such that it made financial sense to deploy it. That just isn't the case. Reality sucks, don't it?

••••••

Transmaster
Don't Blame Me I Voted For Bill and Opus
join:2001-06-20
Cheyenne, WY

Transmaster

Member

I hate to agree....

I am very happy with my Qwest service. My TV comes via Dish Network. My down speed go between 4-7 megs, up speed 600 to 800 or so megs. Last Sunday's episode of time team downloaded at up to 650 kbps. I know this would be laughable in Japan but I don't live in Japan.
Gunner56
join:2004-01-29
Indianapolis, IN

Gunner56

Member

Qwest will be owned by cable....

Qwest services Denver, which I hardly consider a 'rural area'. And Comcast has been slowly but surely stealing their customers for some time now. My brother and his wife live in Denver, and formerly had Qwest home phone / mobile service. They now have the Comcast triple play, and Verizon wireless and are very happy to be 100% Qwest free. Just keep telling yourself that everything is ok, Mueller.

•••••••
irsean
join:2001-05-10
Redlands, CA

irsean

Member

Have you seen the price of copper lately?

In the long run, fiber is cheaper than copper. Vzn's copper maintenance is a money pit, switching to a passive optical network is the only way to have an easily maintained network. Implementation is the only real price. Once the FTTP is in place, very few services can compete.
I love my 15/15Mbps ($70) .

Look for 100/100Mbps for businesses soon.

NOCMan
MadMacHatter
Premium Member
join:2004-09-30
Colorado Springs, CO

NOCMan

Premium Member

Talk about clueless

I hope investors punish that company after such a stupid interview. He clearly is doing nothing more than leading the company to a huge loss in the future.

JammerMan79
Premium Member
join:2004-05-13
Prince George, BC

JammerMan79

Premium Member

New marketing slogan?

Quest.. the new AOL

CCTVTech
Premium Member
join:2003-04-23
Phoenix, AZ

CCTVTech

Premium Member

Re: New marketing slogan?

said by JammerMan79:

Quest.. the new AOL
That just won't die
nutcr0cker
join:2003-04-02
Chandler, AZ

nutcr0cker

Member

Lisa Hook- New CEO of qwest

I nominate lisa hook for the next CEO of qworst
gworkman
join:2005-10-18
Las Vegas, NV

gworkman

Member

They need to do something....

Looking at what is coming down the pike for DOCSIS 3.0 and 50 MB Up/Down speeds, Qwest will need to do something compelling very soon.

Now I know why they are giving "price for life". Life expectancy will be very short if the best they can do is offer 1/10th of the speed....
bogey7806
join:2004-03-19
Here

bogey7806

Member

Re: They need to do something....

I think that the Yankees are more concerned about the Colts than Qwest is about the cable companies who won't be deploying DOCSIS 3.0 in their territory for a great while.
gworkman
join:2005-10-18
Las Vegas, NV

gworkman

Member

Yankees and Colts ???

I think Cox will certainly step up their services in Phoenix and Tucson. I don't know who serves Denver, but that will be another market that will be miles ahead of Qwest (in terms of speed) within the next 5 years. If Qwest decides to sit on the sidelines, "too late" will happen sooner than they think.
bogey7806
join:2004-03-19
Here

bogey7806

Member

Re: Yankees and Colts ???

I'm no longer amazed to see people thinking Comcast or Verizon rolls out faster speeds for charitable reasons.
lvlorpheus
join:2008-02-17
Springdale, AR

1 edit

lvlorpheus

Member

Those really are bad speeds for broadband, but

It must be nice to at least have DSL. I sure wish I could DSL from the fiber line less than a mile from my home, and RT less than 2 miles from my house.

I think what a lot of you are not taking in to consideration is that almost every American can get a home phone line even if they can't get broadband. I think the plan of QWEST is to wait until those phone line are all but useless, because people who can not get a home phone in America will be a load voice, that will be heard. Then we can all pay to build a new network for them "even me who can not get DSL or Cable." Then all they have to do is rake in the profits. As for this guy being dumb, and yes he does sound pretty dumb unless his plan is to do what i said above. He does get paid 1.2 million a year to be that dumb. "He will earn an annual base salary of $1.2 million and a target bonus of up to twice that amount, Qwest said. During 2007, Mueller will receive a guaranteed minimum bonus of $947,000."
»moneynews.newsmax.com/money/arch···4413.cfm
Please don't get me wrong. I think Broadband should be available to you if you get a dial tone. It is the wave of the future. But I think a lot of this we can not/will not build it out is just the big fish at the top feeding off of the rest of us. Heaven forbid they not make more in a few days to a week than most of use make in a year to bleed us dry.
patcat88
join:2002-04-05
Jamaica, NY

patcat88

Member

Re: Those really are bad speeds for broadband, but

Your right, eventually there will be an outcry, I recommend waiting until 2040-2060, when the current Generation Digital. I consider Generation Digital to be people born 1995 and later, 100% of them will know how to use the internet/social networking/how to use computers. The people who are in their 40s/50s/60s will be the descision makers and the people in power in Politics, Financial Markets, and Corporate Executives, at that point, they powers that control us will give us Universal Broadband, because they can't imagine living without it since they grew up with it since they were born. Its like running water, can you imagine living in a house without running water, or flushing toilets? No, in 30-50 years thats what broadband will be. Until then, just wait and cry.

Ben
Premium Member
join:2007-06-17
Fort Worth, TX

Ben

Premium Member

Their Service Area?

What's their service area?

I don't live in a Qwest area, but I've sometimes thought I might move again.

Anyway, it sounds like a horrible future plan.

If I lived in a Qwest area, I would of course have their POTS. I'd also have their DSL if it was available.

But I'd think that they'd be losing out. If they had the fiber, I'd want that fast Internet, and I would likely end up spending more each month. The result? They'd earn more money.

Though I live in an AT&T area, DSL is still not available. Where I live is hardly rural. However, through bad luck I'm currently in a DSL black-hole. I have an apartment so I can move to another one easily. I won't even have to move far to get DSL.

However, because AT&T hasn't made DSL available, they only get money because of my POTS. They don't get DSL money too, and are losing out.

dvd536
as Mr. Pink as they come
Premium Member
join:2001-04-27
Phoenix, AZ

dvd536

Premium Member

Re: Their Service Area?

said by Ben:

If I lived in a Qwest area, I would of course have their POTS. I'd also have their DSL if it was available.
Having endured qwest DSL i'd advise against that.
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