Qwest plans to roll out integrated home services where it ties its services in with those from its partners such as MSN and DirecTV in a move enabled by a thin layer of software, according to Qwest CTO Pieter Poll.
Poll (right) talked about Qwest's broadband strategy of choosing to lay fiber optic lines to a node instead of the home like Verizon, and also discussed the concept of caps on Internet service. Here are the key excerpts from my conversation with Poll.
On the fiber to the premises debate (this topic has been discussed as folks chime in on Verizon's FiOS investment):
Poll said that Qwest's strategy has been to use "fiber to the node," essentially pushing fiber to distribution points that account for about 350 homes and then using copper wiring to reach the home. This approach is also what AT&T uses for its U-Verse service. Poll said that it can offer 12 Mbps and 20 Mbps services. Using VDSL (very high bit rate DSL) 2 modems and pair bonding--coupling copper wires for more speed--Qwest can get up to speeds of 30 Mbps or so. "The hold up is the availability in commercial volume of VDSL 2 modems, which hampers our ability to pair bond," said Poll.
When asked about whether Qwest could keep up with cable companies, Poll noted that the company's current speeds are good enough for high definition streaming of multiple videos. He also said that Qwest doesn't have to carve out bandwidth for video services--unlike most players--because it is sticking to a partnership with DirecTV for TV service.
So why won't Qwest go the fiber to the home route? Simply put, it's too expensive. "The reason for that (approach) is that east of the Mississippi River most plant (cables, fiber, optics etc.) are all buried. The West is all buried plant," he explained. "Now contrast that with Verizon. You have a different story because most of Verizon's plant is aerial (housed on telephone poles). We can't afford to tear up everybody's neighborhood. It's not a question of desirability to fiber to the home; it's what's affordable to consumers. Qwest has 75 percent to 80 percent of its plant buried. Verizon is the total opposite."
Another thread to ponder regarding fiber to the home is that providers want the same architecture. For instance, Verizon will pay more to install buried cables for the minority of its users so it can maintain the same architecture, said Poll. "We could say we'll do 30 percent fiber to the home, but we wouldn't have the same architecture," he added.
On a related question about whether Qwest is appropriately future proofed, Poll said that 35 Mbps downstream is the most likely bandwidth mark needed to keep pace on services for the future. "Thirty Mbps allows you 3 or four HD streaming channels and other information coming into the house," said Poll. "That's not deficient and meets demand at an attractive price. We feel that Qwest is future proof for most services unless there's something else (like a killer app)."
He added that there's ultimately a limit to what a consumer can consume in terms of information.
On the competition from the cable industry in broadband, Poll focused a lot on Docsis 3.0 (data over cable service interface specification), which is the technology that cable providers are hoping can allow them to offer speeds approaching 100 Mbps. "The cable guys are playing a marketing game talking about peak speeds," said Poll. "If you have 100 Mbps in peak speed and it's going into a cable node of 500 homes and 150 subscribers are using the coax segment you have 150 customers sharing that. Stream video across all of it and you have a problem," said Poll. "With what we are doing with fiber to node the experience is far better."
Poll said Qwest had been working on its fiber to node architecture with VDSL delivery for more than a decade. Back then, Qwest was adding copper lines to homes for second phone line and DSL services and looked like that wiring would be a waste. But paired bonding to boost bandwidth means that Qwest will be able to use those assets.
On network management, Poll provided some background on Qwest. Qwest's Internet backbone--it's a top 10 provider--doubles in capacity every 15 months or so, said Poll. However, you can double your capacity every 18 months and still run out of headroom. Once you reach that point "you might think about traffic managing your network."
Poll repeated at least six times that Qwest doesn't discriminate traffic categories and has no intention to. "We should not be harming customer experience by picking and choosing what they see unless it's illegal," said Poll. "We would not take P2P and restrict it. It's very valid. Our high-end subscribers use P2P."
That said, Poll noted that there could come a time when some solution would be necessary. He noted that the top 1 percent of residential customers drive 20 percent of data. If that 1 percent hampers other customers, there has to be something to even the playing field. From here, Poll waded into policies about acceptable use and bandwidth caps. "What I think the industry goes to is a cap," said Poll, who noted that the mean broadband subscriber might use 5 GB to 6 GB in data transfers. Qwest doesn't have a cap, but it does have an acceptable use policy for residential users that are no longer using the service as intended. Poll said Qwest can terminate service, but there's no numerical level that leads to termination.
If the industry moved to a cap it would have to set a limit that would affect only an extreme minority; for example, those using 300 GBs of data transfer a month. Poll added that Qwest only looks at IP transfers, not applications or content. "We have no clue what application is taking place (among customers), but we do have flag reports" that gauge anomalies, said Poll. "Every carrier is using that approach as part of network management strategy," he added.
So why not have a published cap? Poll said "putting a flat cap in place is not fair," but noted that Qwest reserves the right to manage its network so all customers have a great experience.
On Qwest's most valuable technologies, Poll went with the usual suspects--metro ethernet, terabit IP networks and ultra long haul technologies. But what got Poll most animated was services convergence. Qwest is planning to roll out a converged services framework across all of its states. This service, dubbed Q Home (for now), adds an integrated layer of software to combine multiple services. Via a partnership with MSN, Qwest will integrate its phone services with MSN. For instance, when a customer gets a phone call it will also get a MSN Messenger message. Other features include email-voice mail integration and click to call ability from the PC. Similar arrangements will surface with partners like Verizon Wireless and DirecTV. "A thin layer of intelligence can provide real value to customers," said Poll, who also added that integrated bundles with a bus-based architecture have far less churn.