Part III: Keeping customers happy

FierceTelecom: Speaking of residential customers, where is Windstream currently with its own broadband deployment strategy and how do you see it evolving?

Gardner: Customers are using broadband more every day. As the Internet becomes a more important part of everyone's life, we see video continuing to grow. Last year, we rolled out ADSL2+, which enabled us to double the speeds in our markets, and were working on deploying VDSL2 and bonded copper to allow us to increase our speeds and get more bandwidth. That's what we're really focused on in the residential side. On the business side, we're adding capacity and improving our network. The KDL deal is a good example of that because it allows us to be a bigger player in the data space from day one. I think people really understand the importance of that going forward.

FierceTelecom: After initially sitting out of the first round of the broadband stimulus, Windstream opted to go out for the second round of stimulus funding. What drove you to do that and what benefit do you think it will bring for your customer base?

Gardner: We're excited that we were selected in many of the markets. I think it makes sense for the administration and us because getting to that last 10 percent of the residential customers was a real challenge. We had built out broadband to every single customer where the economics justified it. This stimulus money will allow us in the most cost efficient way compared to any of the others that have received the award to build out to that last 10 percent in very rural markets. We're talking about areas where the density is maybe 5-6 access lines per square mile so we're very excited about the opportunity to do that. I think we'll be a good partner there and the administration was aggressive in applying broadband in areas that have never had it before and increase the speeds in most rural areas from 3-6 Mbps.

FierceTelecom: Getting back to the business services segment for a minute, how will the purchase of NuVox and now Q-Comm enable you to deepen your stance in the competitive business market?

Gardner: What we're really trying to do today is drive our sales team to hit quota, but hit quotas on the right kind of products that are going to drive our future. I think our sales force is better trained than ever before and get paid more for selling those services. We have done a good job with NuVox productizing our Ethernet and high speed data offerings in a way to make it easier for our sales team to sell. I think even in this soft business macro environment, we've seen very good progress to push out these new products. Importantly, with NuVox when you think about a CLEC and you put fiber under a CLEC, you make it even more competitive and profitable on day one. We'll see cost improvements from our KDL purchase in our heritage business but also in NuVox.

FierceTelecom: Windstream, along with your two independent ILEC peers CenturyLink and Frontier, have been aggressive consolidators of the Tier 2 ILEC market. Do you see further consolidation of the independent ILEC and competitive telecom market taking place over the next year and do you see yourself as a consolidator?

Gardner: There's no doubt that the last three years have been chock full of consolidation. It absolutely makes sense from a scale and scope perspective. When I look at our relatively performance both from an investment standpoint and from our ability to drive our top line growth and build Windstream into a next-generation telco, I like the path we have taken.

We've been less concerned about the size of our company and more concerned about doing the right kind of deals that not only help us improve our residential business, but help us focus on the enterprise and broadband space going forward. We've been disciplined in terms of what we have paid for our acquisitions, but we have also stayed true to our view of what we can do to remake this company and accelerate that process. That's the biggest reason for the different path Windstream has taken. We've also managed to stay very rural while we're doing that. If you look at NuVox, KDL, D&E and Iowa Telecom, these are all well-run companies in rural America where we think we can drive better results over the long run and lead the way to a next-generation telco.

Part III: Keeping customers happy