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Qwest Blazing Trail for Video

Raymond McConville
News Analysis
Raymond McConville
11/15/2007

Qwest Communications International Inc. (NYSE: Q) has secured a cable franchise in Portland, Ore., leaving it free to compete with Comcast Corp. (Nasdaq: CMCSA, CMCSK), should the carrier ever want to wander into that lovely low-margin wilderness known as residential video service.

Sure, Qwest has said in the past it doesn't have plans to deploy a service like U-verse or FiOS. (See Qwest to Spend up to $300M on FTTN.) But why not just fill out a few dozen ponderous forms just for the hell of it?

"We've simply gone out to clear some of the regulatory hurdles that would be necessary," said a Qwest spokesman, while lacing up his hurdle-clearing sneakers. "We're also going ahead with deploying more fiber in our infrastructure in Portland just to keep options down the road."

Earlier this month, Qwest announced that it would be spending an additional $300 million deploying fiber-to-the-node in the coming year. Portland now appears to be one of the first stops of that crazy train.

Also, Qwest has been applying for video franchises all throughout its footprint at both the statewide and local levels. Portland just happened to be the first city where Qwest was successful.

For AT&T Inc. (NYSE: T) and Verizon Communications Inc. (NYSE: VZ), securing cable franchises has been a frustrating final step in deploying U-verse and FiOS TV in their respective footprints. (See State Video Franchise Push Grows.) Some local franchises take more than two years to secure, and both carriers have been openly vocal about their distaste for the process. [Ed. note: To the RBOCs, Monopoly should be a game played by oneself.]

It is no secret that Qwest has been closely monitoring AT&T's U-verse successes and failures, so perhaps it could be learning from Ma Bell's headaches.

"These are efforts that have taken years in other places," said Qwest's spokesman. "It just happened to be that Portland officials have been looking to bring more competition into their city for a while."

Qwest does already have a video offering of its own called Choice TV that it inherited when it acquired US West. (See Qwest's Quest for Video .) The company would not say whether any video deployment in Portland would merely be an expansion of that old VDSL-based service.

But given Qwest's fiber plans in Portland and elsewhere and the fact that it hasn't expanded Choice TV in quite sometime, the chances of any video offering not being a new fiber-based service are slim.

— Raymond McConville, Reporter, Light Reading

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