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Qwest to view video options
The Denver-based phone company has called for cost estimates from vendors on switching from copper to a fiber-optic infrastructure.
By Andy Vuong, Staff Writer
Denver Post
Monday, January 8, 2007

Qwest is quietly taking steps toward a major upgrade of its network that would ultimately allow the company to offer its own video service on a broader scale.

The Denver-based phone company has solicited cost estimates from vendors on upgrading its copper telecommunications network to a fiber-optic cable infrastructure.

Qwest issued a request for proposals in November, seeking deployment as early as June, according to business consultant Kermit Ross, who has seen the RFP.  He said the contracts could be worth more than a billion dollars over several years.

"It's time for Qwest to be looking at their network in a broad and general way and how to take it into the future, and this is a manifestation of that," said Ross, principal of Frisco, Texas-based Millennium Marketing, a consulting firm that helps equipment vendors secure contracts from telecom companies.

Qwest declined comment about the RFP, which was first reported by online trade publication Light Reading.

"Qwest is always looking to upgrade and evolve the technology we have in place," said company spokesman Jon Lentz.

Lentz added, "Qwest wouldn't discuss or confirm specifics of any RFP."

Qwest is the only Baby Bell that hasn't launched a major upgrade of its network.  Verizon is spending $18 billion and AT&T $5 billion on different strategies.  Verizon is laying fiber directly to individual homes, while AT&T is building to neighborhoods.

AT&T's strategy is less expensive but doesn't offer the same bandwidth capabilities as Verizon's fiber-to-the-home project.

Qwest has said it is closely watching AT&T's efforts, although its RFP inquires about both technologies, Ross said.

"All of the telephone companies are making these network transformations because they have to stay alive," Ross said.

Cable companies and Internet-based phone providers are increasingly grabbing wireline customers from the incumbent carriers.  In turn, the Bells have partnered with satellite-TV companies to offer a package of phone, Internet and video services.

They have also launched their own video offerings in some markets using a technology called Internet Protocol Television, or IPTV, which is digital TV service sent through Internet lines.  Upgraded networks will allow the Bells to do so on a broader scale.

Ross said the deadline for responding to Qwest's RFP was late last month.  He said Qwest will probably spend two to three months reviewing proposals before selecting a vendor.

Qwest's capital expenditures have hovered around $1.6 billion annually in recent years and are expected to remain at that level for the foreseeable future, Lentz said.  Much of the company's spending has gone toward improving the reach and speed of its high-speed Internet Digital Subscriber Line offering.

Through its 14-state local phone service territory, Qwest packages its phone and Internet offerings with satellite-TV service from DirecTV.

The company also offers IPTV to a few select neighborhoods in Colorado, Arizona and Nebraska.

Qwest chief executive Dick Notebaert recently told The Denver Post that 2007 will be a telling year for IPTV.

"I think we're going to see an acceleration of customers' acceptance of newer applications," Notebaert said.  "The whole idea of IPTV ... we'll see if that works -- if customers accept it -- (in 2007)."

Staff writer Andy Vuong can be reached at 303-954-1209 or avuong@denverpost.com.

http://origin.denverpost.com/business/ci_4968128