Qwest Thinking VDSL2, Could Be Too Little, Too Late

The biggest black eye in Qwest’s attempt to bring their broadband offerings into the 21st century has been the abysmal 896Kbps upload speeds, even when using ADSL2+ and FTTN. According to some insider posts at DSLReports, that may change. According to the tipster, Qwest is looking at VDSL2 with plans to bump the upload speeds to 5Mbps with a new top tier pushing 40Mbps/20Mbps. Even so, it’s not enough to catch up to UTOPIA or even Comcast.

The real question is if Qwest can afford any kind of widespread deployment. Since the company couldn’t unload its long-haul operations for anywhere near the asking price, Qwest is where it always has been: too deep in debt, too cash poor, and hemmoraging landline customers to VoIP, cable, and wireless carriers. They halted the current ADSL2+ installs citing that the winter weather was preventing them from continuing the build, but we all know it’s cash flow issues. Like a lot of analysts, I think Qwest is going to continue to wither until they find a cash-rich investor looking for a fixer-upper.

And if Qwest is more-or-less at a standstill, what are the odds of Comcast dropping DOCSIS 3.0 tiers in Utah? Pretty slim unless you live in Provo or a UTOPIA city where fiber is prodding them forward. It’s no secret that Comcast has, to date, focused network upgrades most heavily on areas where Verizon’s FIOS is the king of speed. As half of the duopoly crumbles, you can expect more of the same from Comcast: ho-hum speeds, mediocre pricing, and lackluster customer service (their Twitter damage control unit customer service team notwithstanding).

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23 Responses to Qwest Thinking VDSL2, Could Be Too Little, Too Late

  1. luminous says:

    vdsl2 is still just holding onto decaying copper assets that are long past their useful life span. Qwest is not in a good position for buyout, so much of their network would have to be riped up and replaced that overbuilding into Qwest area’s and picking them up at the bankruptcy firesale would make more sense. If any major carrier where to overbuild into Qwests region it would more then likely force Qwest into bankruptcy.

  2. Jonathan says:

    On a note about halting build outs of ADSL2+. I have seen them working in the past few weeks in the Ogden area.

  3. u235sentinel says:

    they “claimed” they would build out FTTN on the east side of Bangerter in West Jordan this Spring/Summer. I guess we’ll see if that actually happens.

    I haven’t seen ANY activity from Qwest so far.

  4. Capt. Video says:

    It’s important to remember that Qwest does not need to have speeds FASTER than (or even as fast) Comcast or UTOPIA to be successful. They only needs to offer a speed customers want at an price they will pay (an attractive price).

    While I don’t think Qwest is a good company or in good financial shape, they are not poor with $13 Billion in revenues last year and NET Income of $681 million. See numbers below:
    Revenue Gross Profit Op.Income Net In
    13,475.0 8,890.0 2,120.0 681.0million

    Looks like a single years income for Qwest could pay off UTOPIA’s 33 year 1/2 billion dollar debt?

    On a related note, I have just emailed UTOPIA asking if their budget was available for public review. They have to file next years budget with the state within 30 days of adopting in (adoption by Jun 30th) and then it will be on the State Web Site but it should be available now for public inspection as city budgets are.

  5. Jesse says:

    Speed matters. Comcast regularly hammers Qwest on speeds. UTOPIA and its providers do the same. I would contend that the number of people who want a 1.5Mbps DSL line or the “value” 768K cable connection are few and far between. Consumers want the best speed they can get for $40-60 a month.

    Despite their size, Qwest has a negative net value from their $14B in outstanding debts. The company is worthless when looking at their balance sheet and investors know it. That might be why they’re having such a hard time finding a buyer. Want to see Qwest’s future? Look at Hawaii Telecom and Fairpoint.

  6. luminous says:

    The only thing of any value in Qwest is their customers and their long haul network. Pushing Qwest into bankruptcy is as easy as waiting for Qwest to sell their long haul network and then over build into their top 10 city’s, Do that and watch what happens to their stock price.

  7. Capt. Video says:

    I think it’s the customer base that is the most valuable…and admittedly that is declining rapidly. I think they lost almost 20% in the last few years as “phone service” has become a commodity and phone customer generate $20-$30 a month vs. the $70-$90 they might have a few years ago?

    While the Qwest Network may not be state of the art….don’t under-estimate the value of the right of way, poles (ask UTOPIA) and existing underground conduit which will be much cheaper to upgrade than install new (again, ask UTOPIA).

    Qwest is a dying powerhouse, but still part of the current ruling duopoly.

    I think long haul is becoming so cheap the existing installed customer base is their greatest value. While not NEAR as good as FTTH, the existing copper can be upgraded to fiber and/or used with fiber at the curb. Again, not ideal or as good as fiber, but you can deliver somewhat acceptable services via copper as AT&T is doing in their FIOS networks??

  8. Jesse says:

    AT&T is U-Verse and they can only manage up to 18Mbps/3Mbps. Unless they do a bunch of VDSL2 upgrades, they’re stuck.

    Qwest can only stay competitive if they have the money to invest in network upgrades like VDSL2. Given that they haven’t had the money to widely deploy the more limited ADSL2+ and they likely want to milk that investment for all it’s worth, I foresee patchy upgrades at best if at all. Another problem with VDSL2 is that after a mile out, it’s the same speed at ADSL2+.

    So no, I don’t think they can use the copper to deliver acceptable next-generation speeds for very long. DSL is and always has been a technology designed to squeeze blood from turnips. And right now, that turnip has just about gone dry.

  9. luminous says:

    UVERSE is hardly acceptable, grossly over compressed tv service that can only have 2 hd channels at a time and at the expense of your internet bandwidth a 3rd channel. Its upload stinks, People hate those huge UVERSE box’s in their neighborhoods. UVERSE also leaves you stuck with a single ISP option that is very expensive, and has limited options as far as services go(want a couple static ip’s to bad can’t have um). UVERSE is little more then a copper band aide that is not a real solution to the last mile problem. AT&T like Qwest neglects installing their vdsl/dsl/adsl2 etc… any place where it would eat into their business line income leaving many business parks without reasonable broadband service. And as its still a form of DSL their is the whole distance limit thing, to far out and your sol.

  10. Capt. Video says:

    I’m not overly disagreeing with you Jesse, but I guess I’m suggesting that a company with $1.5 billion in free cash flow this year and a very large customer base, even with $13 billion in debt is not likely to roll over and die.

    I surely could be wrong as very few expected GM to be worth “nothing” 10 years ago? I would sure rather be Comcast than Qwest. But I’d also rather be Qwest than UTOPIA.

    As far as bandwidth needed to deliver HD…it continues to drop. I’ve seen the HDTV over VDSL Emery Telecom can deliver over copper and almost all (99.9%) customers would find it very acceptable quality.

    AT&T’s “poor U-Verse service” has over 1 million subscribers and was rated number 1 in the country by JD Powers. Perhaps they are not as bad as you think? They are clearly meeting someone’s expectations if not yours.

  11. luminous says:

    .. you can keep your

  12. Jesse says:

    Hey Capt? Looks like 29% of broadband users want more speed. Just 37% are content with the speeds they have now. As I’ve said before, speed matters and not just for geeks like me.

  13. Capt. Video says:

    More speed is always better…but just asking if you want more speed should get more than just 29% saying yes???

    Is not the real issue related to a balance of speed with cost and company confidence? What percentage of customers are willing to pay more for more speed and how much more?? If speed mattered that much, why does Qwest have ANY broadband customers? All could move to cable or UTOPIA and have more speed TODAY!

    i.e.: To get UTOPIA using the new “special assessment district” method, it would cost someone $6000 to have UTOPIA installed (according to the minutes from the Orem City Council retreat where this was discussed). Residents in the district would pay $25 a month for 20 years as the special assessment (total $6000…$6000 for an install…can you say HOLY CRAP!!).

    How many would elect to pay that for faster internet? How many would elect to pay that, not being sure they would get faster internet for the next 20 years (or any internet if UTOPIA goes “tits up”)? Qwest’s slower internet might be very acceptable to most?

    As a side note…At the Orem council meeting they decided to wait and see how well the program went in Brigham City before deciding to approve the program for Orem.

  14. Anon says:

    All, sorry for hijacking this thread with more SAA stuff, but I was unaware of the stuff Capt. Video pointed out.

    I assume he was referring to page 9 of this document:


    As I read it, Orem is going to start the ball rolling on an SAA, but not commit to anything until more information becomes available.

    Also, $6,000 is the total cost over 20 years, including interest. If you paid it all up front, it would be much lower. Working backwards from their $25 over 20 years bit, and assuming a 6% interest rate, then the cost would be more like $3,500 if you’re willing to pay in lump sum.

    It’s definitely steep, but if it came with a discount in the service price of your triple-play, people might see it as worth it.

    I’d like to see some better numbers, both for an up-front install cost and a monthly service discount amount.

  15. luminous says:

    Everyone who wants HD tv for one, thats atleast 18mb per channel for good Quality, Voip services such as ventrilo can chew up several mb’s. Then you have all the poor people trying to work from home, have you seen VNC on a 1.5mb DSL line it aint pretty, Windows remote desktop is worse I ended up have to drive to weber university from layton everyday to use the lab their as remote desktop was unusable.

    so if you have 2-3 HD channels, an brother raiding on WoW with ventrilo going and enough interface mods to kill a horse, remote desktop for work or homework. I could easily see that being the norm for many people. and that could easily be chewing up 60mb worth of bandwidth as a whole

    Now given I understand that I have special needs (a static ip address) and comcast won’t sell me one so I am stuck on 1.5meg dsl. and I don’t have cable service, but trying todo basic things like remote desktop while anyone else in the house is using the connection is a futile effort. Even if I could get Qwests 20mb CFTN adsl2+ line their upload being limited to 896kb would likely prevent me from being able to utilize the line in any realistic manner. AT&T’s UVERSE is the same way reasonable download but crap upload.

    And in both cases with Qwest CFTN or AT&T UVERSE,
    I am stuck with their ISP I can’t choose to use Xmission that choice is taken away from me. I like my current provider (Xmission) i have used Qwests ISP, Earthlink, and a few other local services. Nobody has given me the quality that Xmission has. I want Choice, I want speed, I want upload speed as well, I want service providers that give me options like static ip address’s(yes plural with Qwest.net you can get 1 static thats it with comcast none).

  16. Capt. Video says:

    Special Service District Pricing:

    I have heard TALK of a discount to your monthly service rate but never heard anyone state what that discount would be?? I’d love to get FULL and complete pricing details.

    The real concern I would have is that the $25 a month is sort of a lien on the property. When you sell the property the $25 goes with it.

    I would be concerned that the “discount” is not as strong a guarantee as the payment. Do you receive some legal binding assurance of the lower rate? You WILL have a legal binding commitment for the payment for 20 years.

    …and as I’ve mentioned, if UTOPIA sells or goes out of business, you will still be paying the $6000 even if you are forced to sign up with Comcast or Qwest. Thus you could be paying for your UTOPIA install for 15-20 years after you no longer have UTOPIA service.

    Who knows what the competitive landscape will be like in 5 years no less 20 years. Who would make a commitment to a service provider for 20 years in advance? Will they offer competitive rates or service for the next 20 years? Who could know? Who would commit?

    But until we know FULL details (as rare as hen’s teeth from UTOPIA) we really won’t know. I may change my tune after hearing a different story that somehow protects the homeowner from the issues I’ve mentioned?

  17. luminous says:

    I wouldn’t have a problem with Qwest or Comcast if they provided the services I need. Given I want to choose my isp, Qwest using their new CFTN deployments to push third party ISP’s out of business by not allowing them access to their customers shouldn’t be allowed. I have the same opinion of UVERSE, and FIOS. I understand that the cable network topology for the most part prevents practical multi provider access. At the rate things you going you will have only 2 internet service providers, Qwest and Comcast. And if they don’t provide or refuse to provide the service you need or interfere with a service provided by someone else you will be SOL.

    Utopia still has a load of issues to work past, transparency, paying their bond dept, deploying fully in their member city’s. But Utopia represents a possibility that is worth every cent of its cost. 25$ per month isn’t that bad, and if you sell your property having fiber up to the property increases the value of the property more then enough to make up for the $3500 or so that installation costs. you can even write a chunk of that 25$ per month off to the savings of not having to pay into the FUSF with your Qwest bill.

    The current situation with the Telco’s is utterly unacceptable, how much money have we given them over the years for the services we are getting just now via Utopia. The whole nation needs to move past the Telco monopoly, its holding our economy back slowing growth and costing us jobs.

  18. Jesse says:

    All of the SAA talk is purely speculative. The idea is out there, but the specifics have not taken any form yet. It’s also worth mentioning that install costs will vary wildly from area to area depending on the amount of aerial vs. buried cable. Who owns the cable would be a matter to be decided later, but I wonder why there is such a fuss over public ownership? After all, we pay for water, sewer, roads, etc. with an SAA and don’t demand a personal stake.

    Any number would be a guess at best, but remember that Verizon has done installs for well under $2000 per home passed. Even at this high figure of $2000 and a 6% interest rate, you’re looking at $14.33/mo for the installed infrastructure or a total cost of $3440.

    Capt: Why Qwest has any customers is beyond me. Their customer service stinks, they aren’t competitive on speed, they aren’t very competitive on price, and the bundling options are mediocre at best. I guess dominating a market for decades and having little competition is what’s sustaining them? Customer ignorance that there’s a better product? Animosity towards the cableco? It’s certainly not delivering the best product possible at the best price possible with the best customer service possible.

  19. Capt. Video says:


    I agree with you.
    Having choice is ALWAYS good!
    I don’t like that Qwest and Comcast have closed networks and I like the iProvo and UTOPIA models.

    My point has always been it’s a lot more complicated that just “Who has the best network!” If that were the only issue both iProvo and UTOPIA would have been overwhelming successes.

    As Jesse points out in the next email, Qwest should have no customers…but that’s not the case. There clearly is much more at play than which network is the best.

    To be successful one need not be the best…or even overly good, One only need be “good enough” and have “acceptable” rates and service…and it sure helps that most customers have considerable reluctance to changing providers.

    I subscriber to Broadweave (and am very happy supporting them), if I didn’t live in Provo and lived where UTOPIA was available, I would support them with my business.

  20. Capt. Video says:

    The SAA details have taken enough form for the Orem City Council to discuss them. The costs we have come from the meeting where the UTOPIA bond rep was present (or so it appears from the City Council minutes).

    If we don’t have the right information it’s only UTOPIA’s fault for failing to inform the public of the costs/benefits. This idea has been around UTOPIA a long time and time is not something UTOPIA has to waste.

    I would guess UTOPIA needs more than just the install cost paid by the customer. I doubt they have capital to build the plant to the homes, so that may account for the higher than expected cost?

    Would we not love to hear from UTOPIA to clear up the confusion on how the program will work?

  21. Anon says:

    To your question about the fuss of public ownership… please don’t read into my comments that I am against it. If my participation in the SAA is fair relative to non-SAA subscribers, then it’s fine with with me if UTOPIA owns the fiber I paid to have installed. I just think if I’m paying to have the fiber installed, and potentially paying the bond service too, I should get a significant benefit relative to the non-SAA subscribers. Priority deployment only counts for so much in my book. It has to work on the bottom line too, or it’ll be DOA.

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