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story category Qwest Stands Pat On Network Upgrades
CEO blames sour economy for financial woes...
09:59AM Tuesday Jun 10 2008 by Karl Bode
tags: business · telco · Qwest.net
Qwest's delayed next-gen broadband plan (leaked to me last Summer) is to spend $300 million to deliver 20Mbps ADSL2+ to about 1.5 million customers over the next two years. The company is also testing line-bonded VDSL at speeds of 38Mbps, but they've repeatedly stated they aren't interested in being a video provider. Speaking at a Deutsche Bank AG Technology conference this week, Qwest CEO Ed Mueller warned that a souring economy meant they wouldn't be expanding those plans "without a really compelling case."

Related:
  1. Sorry Qwest, 'Next Generation' Broadband Isn't 896kbps Upstream
  2. Qwest Blames Bad 2nd Quarter on Competition
  3. Qwest, Union Strike Deadline Sunday
  4. Qwest, Union Contract Expires, Negotiations Continue
  5. Qwest, Unions Strike Deal
  6. Qwest Wants Comcast Taxed Like A Telco
  7. Qwest Defends Not Running FTTH
  8. Qwest Figures Out That Speed Sells
Forums » Qwest Stands Pat On Network Upgrades
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Post a:
Millenniumle

join:2007-11-11
Erie, PA

...

Why bother upgrading. I'm mean really. If you can just stifle development of new services and make people not want to hit the refresh button with caps and fees there isn't much need to expand.

Transmaster
Onward Through The Fog

join:2001-06-20
Cheyenne, WY


edit:
June 10th, @10:15AM

What are you talking about....

Sure the fee's are irritating but caps I have yet to hear anyone getting capped off by Qwest. I am sure if that had happened we would have heard of it here. As for VDSL I could care less I have my Qwest account for the internet, yes I download TV programs but I rarely stream anything, Maybe NASA TV, to get a laugh on the Robot Chicken site, or checkout stuff on You-boob but anything else phooey.
--
Send a prayer to Allah, eat Beans.
espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq

Re: What are you talking about....

said by Transmaster See Profile :

Sure the fee's are irritating but caps I have yet to hear anyone getting capped off by Qwest. I am sure if that had happened we would have heard of it here.
We have heard of it here: »Qwest's 'Excessive Use Policy'
viperlmw
Premium
join:2005-01-25

Re: What are you talking about....

Actually, that refers to Qwest's 'Excessive Use Policy', not a cap. I have not combed thru that thread recently, but when it was active, a 'cap' was only speculated, not confirmed.
espaeth
Misanthrope
Premium
join:2001-04-21
Minneapolis, MN
·Comcast
·Embarq

Re: What are you talking about....

said by viperlmw See Profile :

Actually, that refers to Qwest's 'Excessive Use Policy', not a cap.
Potato Potato?

If there is an excessive use policy, then by definition the connection is not unlimited. (hence there's a cap)
dynodb
Premium,VIP
join:2004-04-21
Minneapolis, MN

Re: What are you talking about....

Yes, you can (after warnings) get booted for excessive use, but the limit is pretty high. I've been on the Qwest forum for years, and we almost never hear of anyone being warned much less banned.
Millenniumle

join:2007-11-11
Erie, PA
Just referring to the seemingly general trend of cap and fee. So I ask, rhetorically, why bother investing in upgraded speeds when the cap and fee structure will pretty much put an end to any need for it.
openbox9

join:2004-01-26
Navarre, FL

Re: What are you talking about....

Even though your questions was rhetorical... Because ISPs have shown that they will upgrade their networks to compete and to provide new and enhanced services.
Mr Matt

join:2008-01-29
Eustis, FL
·Comcast


edit:
June 10th, @03:25PM

Operating an ISP is owning an money pit.

As a former ISP insider I witnessed my employer attempt to remain profitable for over Six Years and finally throw in the towel. I wonder if other ISP's will begin to take Qwest's and Embarq's position and decide they cannot afford to upgrade their networks every Twelve to Eighteen Months. Management views those upgrades only required to meet the desires of what they view as a limited number of customers. For example between 1994 and 2000 the dial-up industry went through about Seven generations of modems. If an ISP did not upgrade their modems they simply lost customers until their business was unsustainable. Although the number of my employers customers increased, because of competition the revenue per customer dropped. Early on competition forced the company to go to flat rate pricing. Between 1996 to 2000 the time a customer remained connected to a modem port each day more than doubled. In order to provide satisfactory service the company found it necessary to add modems without receiving more revenue. The cost of services the company needed to continue in business increased rather than decreased. The company explored the possibility of offering DSL Service but quickly discovered that the Telephone Company wanted to keep most of the revenue. It turned out that the net profit from a DSL Subscriber was less then the net profit from a Dial-Up Subscriber. The company saw the handwriting on the wall and sold their 40,000+ customers to a national ISP. Over the past couple of years there have been a number of ISP's that offered DSL Service that have gone out of business. I wonder what direction the national broadband providers will go and what schemes they will use to limit their customers use of their services.

When an ISP subscribes to an OC3 for example they have several choices. Full 155Mbps, Fractional a fixed throughput less than 155Mbps or burstable with a base rate say $3,500.00 for 40Mbps with a fee of say $80.00 for every Mb they exceed their base rate at any time over an specific period, usually one month. There was never a provision in a contract for an OC3 or other facility that limited the total amount of data transmitted through that facility. CAPS are a creation of the ISP's in order try and keep internal costs down so they can remain profitable.

JasonOD

@comcast.net

Re: Operating an ISP is owning an money pit.

While I agree that running an ISP is tough, Quest is in a different position as the incumbent, and can make a tidy profit from leasing their lines to other ISP's/CLEC's. The regulatory environment has also moved to their favor, thanks to the Telecom's lobbying efforts.

At the present stage, Quest needs to concentrate on maximizing shareholder value (as they should all do, but especially Quest), which means quick returns on investments and hard decisions. If the balancesheet improves, then maybe they can look at other investment/upgrade options, but not right now.

I don't think they can count on another FairPoint to come along and zap their debt in exchange for a couple unprofitable states.
jester121

join:2003-08-09
Lake Zurich, IL
·ViaTalk

Re: Operating an ISP is owning an money pit.

said by JasonOD :

While I agree that running an ISP is tough, Quest is in a different position as the incumbent, and can make a tidy profit from leasing their lines to other ISP's/CLEC's.
As Mr Matt explain in his excellent post, the margins aren't there on the wholesale side -- it's too expensive for the CLECs so they aren't going to offer it, so Qwest can't sell it, thus no profit.

AZ_OGM

join:2007-01-12
Phoenix, AZ

Let somebody else do the dirty work

"but they've repeatedly stated they aren't interested in being a video provider."
With the exception of Phoenix, Denver, and Omaha, they let DirecTV be their video provider.
They continue to lose their market share in what few large metro areas they serve to Cox, Comcast, TWC, et al.
Despite Qwest still playing the "wait and see" game, Cox has just upped the HSI speeds here in Phoenix (see article above this one).

alanhdsl
Premium
join:1999-10-09
Phoenix, AZ

No upgrade path

I'm one of the customers getting video from Qwest (in Phoenix via VDSL). However, once I upgrade to HDTV I'll almost certainly switch to Cox or satellite. Their HDTV offering doesn't support CableCards.

bmw1200clc

@iauq.com

Re: No upgrade path

Go for the HDTV from DirecTV, its great, billed through my Qwest bill and I even get my Red Sox games!!

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

said by alanhdsl See Profile :

I'm one of the customers getting video from Qwest (in Phoenix via VDSL). However, once I upgrade to HDTV I'll almost certainly switch to Cox or satellite. Their HDTV offering doesn't support CableCards.
They're just reselling direct tv satellite now.
I heard that having the video VDSL was a way you *could* get qwest to turn down the interleave settings on your DSL.
--
When I gez aju zavateh na nalechoo more new yonooz tonigh molinigh - Ken Lee

MexiCubAZ

join:2000-06-09
Phoenix, AZ
clubs:

COX sent met a letter about 3 weeks ago moving 30+ channels to a switched service that is no longer supported by cablecard. Eventually COX will just quit supporting cablecards all together.

I love my cablecard service and refuse to pay them almost $20 for an HD-DVR when my TV has built in DVR and works great w/CABLECARD.

Too bad as a Qwest employee I am unable to get Qwest ChoiceTV in my area and DTV would not work due to strict install rules in my neighborhood.
--
Join the DSL Reports SETI@Home Team!

AZ_OGM

join:2007-01-12
Phoenix, AZ

Re: No upgrade path

As long as your install falls within FCC guidelines, your HOA doesn't have a leg to stand on. I have seen many landlords try to stop the install of dishes but have had the FCC's ruling stop them in their tracks. Try the link and see if it helps you out.
»www.fcc.gov/mb/facts/otard.html

KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

"We're not interested in a viable future...."

"Our plan is to use our geographic monopoly to be a monolith and just rob the people who have no choice but to deal with us. Meanwhile we hope some idiot er investors come and buy us out."
patcat88

join:2002-04-05
Jamaica, NY

Re: "We're not interested in a viable future...."

Collecting USF $ is the conerstone of their business model.

jinjimbob
Troy Mcclure

join:2001-11-13
Enumclaw, WA
·Qwest.net

said by KrK See Profile :

"Our plan is to use our geographic monopoly to be a monolith and just rob the people who have no choice but to deal with us. Meanwhile we hope some idiot er investors come and buy us out."
Spot on.

WiseOldNerd
De gustibus non est disputandum
Premium
join:2001-11-25
Newport, OR
·Charter Pipeline
·Qwest.net
·Packet8

Qwest Losing It's Appeal

Recently, I made the move from Qwest DSL to Charter cable HSI. The primary reason was Qwest's unwillingness to improve their infrastructure in the Newport area to enable higher connection speeds. I had communicated with their corporate staff about this and was told there is no plan to make those improvements in the foreseeable future. Thus I am voting with my wallet. While we will maintain our POTS voice service since it works even when the power goes out, I have shut down the Cisco and am ending the DSL service. I have had Charter for over a week and it has remained very fast and stable.

Given Cox's speed improvements in the Phoenix area, I will probably move from Qwest to Cox in the fall. Too bad Qwest is good if you live close to Central office, have new copper and want to run servers, but their refusal to upgrade their old infrastructure places the customer at the bottom of the pile rather than the top. They should start focusing on the long term and not quick quarterly profits to please Wall Street.
--
My perception is REALITY

AZ_OGM

join:2007-01-12
Phoenix, AZ

Re: Qwest Losing It's Appeal

said by WiseOldNerd See Profile :

They should start focusing on the long term and not quick quarterly profits to please Wall Street.
The one thing Cox has over Qwest is that Cox is a privately held company. The only investors they have to please is themselves.
Forums » Qwest Stands Pat On Network Upgrades


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