Video services

Qwest Tuning Out ChoiceTV

Qwest Communications International Inc. (NYSE: Q) is phasing out its VDSL-powered ChoiceTV service in portions of Arizona and Colorado, urging those video subscribers to shift over to a bundle centered on the telco's high-speed Internet service and its partnership with DirecTV Group Inc. (NYSE: DTV).

Qwest made the decision after its IPTV set-top manufacturer said it would stop supporting and manufacturing boxes for ChoiceTV. Those boxes were originally developed by Next Level Communications, a company Motorola Inc. (NYSE: MOT) purchased back in 2003. (See Pioneering TelcoTV Service Laid to Rest and Motorola Buys Rest of Next Level.)

A Qwest spokeswoman confirmed that the telco expects to complete the phasing out of ChoiceTV in the Phoenix area by the end of 2009. In Highlands Ranch, Colo., where Qwest has far fewer VDSL video subscribers, the telco expects to complete the ChoiceTV turn-off by the end of 2008.

Qwest reportedly has 42,000 ChoiceTV customers in Arizona, and is believed to have 2,000 or so in the south-of-Denver suburb. Cox Communications Inc. is the incumbent cable MSO in Phoenix, while Comcast Corp. (Nasdaq: CMCSA, CMCSK) holds that distinction in Colorado. Both are expected to swoop in with offers aimed at picking off ChoiceTV subscribers before they can move to Qwest's DirecTV bundle.

Although ChoiceTV was considered a pioneering, cutting-edge effort when it got off the ground in the late 1990s, Qwest and Next Level never added key advanced services and features to the platform, including high-definition television (HDTV), video-on-demand (VOD), and digital video recording (DVR).

Now, Qwest plans to offer all those services.

"Our [video] focus continues to be on the DirecTV relationship," says Steve Sklar, Qwest's director of product management, noting that the telco can offer the satellite TV bundle across Qwest's 14-state footprint.

He adds that new products from DirecTV, including its broadband-based VOD service, will fit in well with Qwest's fiber-to-the-node (FTTN) installations, which are paving the way for Internet speeds of up to 20 Mbit/s. In August, Qwest's FTTN expansion reached 1 million potential residential and small-business customers. The telco expects to have FTTN-based services available to 1.8 million business and homes in 20 markets by year-end. (See Qwest to Spend up to $300M on FTTN and Qwest Moves Quickly With FTTN.)

The DirecTV-on-Demand service requires a "Plus" HD-DVR and a broadband connection with a minimum connection speed of 750 kbit/s. (See DirecTV Pushes Play on VOD Beta , and DirecTV VO-Whenever.)

Qwest, Sklar adds, will take advantage of home-networking systems that allow customers to move media from the PC to the TV. The telco is also outfitting its high-speed Internet portal to support DirecTV's remote DVR scheduling feature.

"We're trying to add value to the whole bundle through DirecTV," Sklar says. "Phase one was the bundle… and [offering] discounts and the ability to get all the products on one bill. The next phase is really getting these products to work better together."

— Jeff Baumgartner, Site Editor, Cable Digital News

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