IP Capsule – August 23

Planet Ten
Qwest is laying the regulatory groundwork to offer video services in several cities in its operating territory, even as its plans for video service deployment remain vigorously tentative.

According to documents obtained by Broadband Reports, in the not-so-distant past, Qwest planned to have video available to 8 percent of its customers by the end of 2007 (potentially within reach in part because the company already has some long-standing video deployments in Denver and Phoenix), and to 24 percent of its customers by the end of 2008. Qwest had identified Seattle, Minneapolis, Albuquerque, Portland, Salt Lake City and Des Moines as its targets for video rollouts.

Iowa in May enacted legislation that will allow for statewide franchising; that will cover Des Moines. Qwest’s recent attempt to secure a video franchise in Seattle, Wash., was scuttled, reportedly by the local utility commission’s demand that Qwest commit to a city-wide deployment, a demand Qwest says it will not agree to meet.

Qwest may be closest to getting a franchise in Portland, Ore. The process there still has several steps to go, but the city could grant final approval as early as mid-November, according to Dave Olson, director of Portland’s Office of Cable Communications & Franchise Management. Qwest could then offer video in Portland starting the beginning of 2008.

Olson said that public response, including formal comments from a large number of consumer groups, has been overwhelmingly in favor of granting Qwest a franchise. The notable dissenter is Comcast, the only other organization cleared to deliver video in Portland. (Verizon, by the way, has the rights to roll out FiOS in several towns immediately to the west of Portland and is in the process of doing so.)

A Qwest spokesman told CED that while Qwest will certainly be expanding its video footprint before the end of 2008, it is not going to be ready to start doing that in Portland as the year begins.

Lord John Whorfin: WHERE ARE WE GOING?!       Red Lectroids: …Planet Ten.     Lord John Whorfin: WHEN?!       Red Lectroids: …Real soon…

—from “The Adventures of Buckaroo Banzai Across the 8th Dimension”

Qwest is now in the process of extending fiber deeper into Portland neighborhoods. The company has no plans to do fiber to the premises in Portland (except in some greenfields, consistent with what the company has always said). The franchise pact includes an explicit injunction against redlining.

As widely expected, it looks as if Qwest will be following a technology model closer to AT&T’s than Verizon’s – fiber to the node rather than to the home.

A Qwest presentation from May, prepared for Portland area regulatory bodies, shows a simple network diagram from which a little can be inferred about which way Qwest was leaning, at least as of May.

In the customer premise, every TV has a set-top box associated with it. A notation says “Pair bonded (2 pairs) for HD, 3 SD, data and POTS.”

And the diagram not only invokes POTS – plain old telephone service, but also shows telephony being delivered via a classic Class 5 switch, suggesting that voice over IP may very well not be an element in the service bundle when Qwest introduces video.

The Qwest spokesman said the company is still defining a VDSL-based network, and remains undecided on any number of implementation details.

As for the franchise agreement, it would be, according to Olson, the shortest ever granted in the area – only six years. That’s apparently to make sure that the company has incentive to expand in the market.

According to regulatory documents: “Franchise may be extended an additional two years to Dec. 31, 2015, if, at the end of the third year, or by Dec. 31, 2010, Qwest offers cable services to 20% or more of the homes in the city of Portland; and an additional three years to Dec. 31, 2018, if, at the end of the sixth year, or by Dec. 31, 2013, Qwest offers cable services to an additional 30% or more of the homes in Portland.”

(According to a local census, Portland has a population in excess of 560,000.)

Qwest does not have to notify Portland of its build-out plans until next July, however. Between that and Qwest’s dithering on its technology options, plus having a new CEO coming in who will no doubt want to review the company’s video plans, Qwest is going to be lucky to have anything more than a token deployment in Portland before the end of 2008. And if it has 24 percent of all of its customers able to get video by the end of ’08, it’ll be a minor miracle.

Q: WHEN ARE WE GOING TO HAVE COMPETITION?
A:… Real soon...