Qwest: Conservative, but aggressive - Fiber to the X

Out of the three remaining RBOCs, Qwest is the clearly most conservative when it comes to Fiber to the X (FTTX). The most notable difference is that unlike Verizon and AT&T, Qwest has no interest in being in the television business. Instead, Qwest's Chairman and CEO Ed Mueller believes with Fiber to the Node (FTTN) capabilities of 40 Mbps, he can deliver a compelling video experience that could span various mediums, including a mixture of digital broadcast, over-the-top video and on-demand programming.

During the second quarter 2009 earnings conference call, Mueller was upbeat on the prospect of "We believe there is an over-the-top video strategy," Mueller said. "Our research shows it is getting better."

In 2008, Qwest officially went public with its Fiber to the Node plans when it launched its Qwest Connect Quantum and Connect Titanium service packages that initially offered speeds of up to 20 and 12 Mbps, respectively. Initially, Qwest's Fiber to the Node/Neighborhood incorporated ADSL2+, a technology it will continue it will continue to leverage in the majority of its markets.

With 2 million potential customers in its local service region eligible for its FTTN capabilities as of the second quarter of 2009, Qwest this past summer began rolling out a VDSL2-based service over its FTTN network in select markets offering speeds of up to 40 Mbps to qualifying customers of course. Qwest has made the service available on limited basis within its FTTN footprint to qualifying customers in its Denver, Tucson, Salt Lake City and Minneapolis/St. Paul markets. Qwest's VDSL2 offering is competitively priced: a $99.99 package with 40 Mbps downstream/5 Mbps upstream for a year, and a $109.99 package with 40 Mbps downstream/20 Mbps upstream.

Qwest appears to be taking an opportunistic demand-based approach to using VDSL2 in the second leg of its FTTN tour.

"The easiest way to think about it is as Qwest builds new areas or as we augment existing areas for capacity, we'll deploy VDSL2 technology," said Travis Leo, Director of Broadband Product Management at Qwest. "If there's enough demand in an area to go back and augment for the faster speeds, we can certainly do that without a huge amount of capital expense. However, if our 20 Mbps service is enough for most customers and they are happy with that, we'll continue to coexist with ADSL2+."

Not to be outdone, cable is already responding to Qwest's VDSL2 drive. Not long after Qwest made its VDSL2 offerings available both Cox and, more recently, Comcast launched a DOCSIS 3.0 in Qwest's Phoenix and Denver markets.