Adam Maloney wrote:

>>It was in response to lower rates for DSL.
>>    
>>
>
>Qwest has been (smugly) sitting on the sidelines while the cable
>companies have been gobbling up market share and pricing themselves out
>of business (consider the small but steady rate hikes, moreso in TV
>service, and the not-so-unlimited unlimited internet service - remember
>how cheap cable used to be?  Even without the $6.00 Radio Shack
>descrambler <g>).
>  
>
I also remember when phone service was cheap ... but I agree that QWest 
is sitting on the sideline, and probably always will. I had DSL, moved 
across the street, now I can't get it and due to issues with the phone 
system between the CO and my house they tell me its unlikely that I will 
ever have the DSL option. BTW, I live in St Anthony so its not like I'm 
6 miles out of East Bumf#$k and expecting service :-)

I'm afraid that I don't see anything particularly redeeming about 
circuit-switched copper. Cable companies have just finished a massive 
upgrade to their systems so that they can offer video, broadband and 
phone service over their systems. The video largely pays for the 
connection making them strong competitors in the market for local phone 
service and broadband. I used AT&T digital phone for the last couple of 
years and recently switched to Vonage - I can't conceive of the 
circumstances that would convince me to go back to paying twice as much 
to QWest for the same services.

And I'm not the only one. QWest is one of the most impacted companies 
when you look at people switching to other companies for local service. 
I just can't see how a circuit based system can economically compete 
with a packet-switched system. And if you start losing large numbers of 
phone customers to VoIP or digital cable-based phones all you're doing 
is increasing the average overhead cost for the remaining customers. The 
inflexibility & overhead cost of the current phone system, coupled with 
the regulatory requirements for universal service, makes it hard for 
competent RBOCs to compete let alone a company like QWest.

>They priced their service to be competitive with DSL, and I imagine they
>were operating on a pretty significant loss, or at least very little
>profit.  They were gambling that they had deeper pockets than Qwest, to
>afford operating their network long enough to gain a larger install base
>so they could raise their rates to what they should be (and they could
>afford the customer exodus it would cause, because of their market
>share).  I guess that's called a pawn storm :)
>
>  
>
That would be more convincing if QWest was in a position to compete with 
cable. Most people in the metro area have the option of cable broadband 
from either Comcast or Time Warner. I think something like 40% are 
locked out of DSL because of technical issues. There is no way for Qwest 
to take advantage of any disaffection for that 40%, nada, no way, no how.

>It will be very interesting.
>
>But I could be dead wrong :)  This is just the feeling I'm getting,
>watching the action from the stands.
>  
>
All it takes to see how lame QWest is in this business is to take a 
serious look at their announcement that they are going to start offering 
VoIP services to their customers. So I need a phone line to get DSL so I 
can use VoIP - what's wrong with this picture :-)

--rick



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