Q&A: Behind Qwest's big broadband stimulus bid

How Qwest plans to go large on rural broadband

Qwest is determined to go big on rural broadband. As the application deadline for the final round of broadband stimulus grants passed this week, Qwest submitted a proposal that, if approved, would dwarf the size of the other broadband stimulus projects throughout the country.

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How large are we talking about? Well, consider that the biggest broadband infrastructure project to receive funds so far has been the $126 million grant awarded to the West Virginia Statewide Broadband Project. Now consider that Qwest's proposal is asking the government for $350 million in funds and you can see that this has the potential to be an enormous project that spans multiple states.

Steve Davis, Qwest's senior vice president of policy and government relations, recently talked with Network World about his company's game plan for deploying broadband in some of the most hard-to-reach areas of the United States.

What is Qwest proposing to build out?

We want to build out high-speed Internet services that will give customers maximum speeds of between 12M to 40Mbps. Our goal is to have these services reach more than 500,000 homes and businesses across the 14 states where we operate as their local phone company. Our plan is to take advantage of already having fiber built out nearby and extending it into rural areas.

How are you going to connect people? Through copper, fiber or wireless?

We're doing fiber to the neighborhood. So once we get fiber into a neighborhood, we'll have copper going to connect the last mile.

How much will this project cost?

The entire project will cost $467 million, of which we're asking the government to pay $350 million, or about 75% of the total cost. The money will go toward putting fiber in ground, for deploying fiber, for upgrading central offices, and for deploying remote terminals that provide high-speed Internet access. This is a project that is so large that it would be cost prohibitive absent some type of government subsidy. It's not something we will try to do on our own if our application is rejected.

Why did Qwest decide that it wanted to apply for broadband stimulus grants?

It was something we looked at immediately when stimulus funds were first announced last year. It's a time-consuming effort determining where we could deploy broadband and doing all the engineering and ecological reviews to determine speed of services we could provide in which areas.

We had considered filing for funding in the first round of the program but the rules were cost prohibitive in that round. The agencies did make some significant changes in round two and they made it more attractive for companies to seek support to provide service in rural areas. The biggest change was agreeing to fund 75% the cost of projects in rural areas, whereas before they were only willing to fund 50% for those projects.

What sort of leg work do you have to do for a project this large?

Well, we know that there's a significant demand for high-speed broadband wherever people live, so we already knew that people would want this service if we offered it. It really came down to the question of whether that deployment can be made at a reasonable cost.

So most of our work involved identifying the number of households in a given area, and also identifying where our competitors already serve since we don't want to build out where someone has already got services up and running. There are a number of specific issues involved in designing project of this magnitude. If you just look at some of the states we serve such as Montana and Washington, for instance, you'll see there are big geographic challenges there in building in mountain regions. As I said, it was a pretty time-consuming process.

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