Qwest CTO talks about industry in flux

LAS VEGAS – Many Internet service providers are finding themselves going through a period of transition, as higher bandwidth demands are forcing them to take a fresh look at their pricing and business models. In particular, ISPs such as Comcast, AT&T and Time-Warner Cable are looking at placing caps on the amount of monthly bandwidth their customers can consume in order to free up more capacity during peak hours. In this Q&A conducted at NXTComm in Las Vegas this week, Qwest CTO Pieter Poll gives his take on the many changes going on within the telecom industry, from peer-to-peer management to industry consolidation.

There has been a lot of talk recently about P2P traffic management. How does Qwest currently manage P2P, and how do you anticipate it changing?

First, we are chatting with a lot of different companies that are in the P2P business about how we can work together to drive P2P adoption while also easing a lot of the problems that P2P traffic can cause. Particularly, there’s been a lot of discussion revolving around technologies such as the P4P Working Group that would help P2P networks become more well-behaved.

Like other carriers, Qwest has an acceptable-use policy, and folks who are on the extreme side of that policy are notified that they’re on the extreme side of consuming a lot of bandwidth. But we’re also trying to look beyond just managing P2P traffic. What we’ve found when we look at the highest end users is that a significant percentage of what they use is certainly P2P traffic, but also that their high bandwidth consumption could be the result of malware infections, or of Web cameras running 24 hours a day. These are issues that they likely don’t know about.

As far as handling P2P traffic in the future, the first thing you should know about our architecture upgrades is that they are not triggered by any one investment. Given that new people are constantly coming to our network, and given that our IP network traffic is doubling every 15 months, we’ve made upgrades in our core IP, we’re investing in metro Ethernet, and for consumers we’ve put a lot into our investment in fiber-to-the-node. We’ve now announced that we’re going to offer 12Mbps and 20Mbps DSL.

How does Qwest feel about its network footprint? Since you’re mostly based out in the Midwest and on the West Coast, are there plans to move further east in the near future?

Well, I’d like to clarify that we’re not just a regional carrier. Yes, we have a 14-state footprint where we’re the incumbent wireline carrier, but we also have a nationwide business, offering services such as transport and VoIP nationwide. With our VoIP portfolio, we are a voice provider across the mainline United States. In fact, we have businesses that are getting voice services in New York City today. About 50% of our customers are actually outside our traditional 14-state footprint.

Recently, Qwest rolled out more high-speed Internet service options with connection speeds of 12M and 20Mbps that will be available in 23 markets in 10 different states. Do you have any plans to expand this service to more areas?

We’ve announced that we are investing up to $300 million for these new services, and our goal is bring them 1.5 million homes by the end of the year. We have for a number of years been building out fiber-to-the-node networks. That’s been part of our plans for last the five years or so. And based on the success of that plan, we’re going to continue rolling that out.

What’s your take on all the consolidation that’s been going on the telecom industry? Do you think that the industry has become too consolidated?

I think that people will look at consolidations when it makes business sense for them to do so. Two years ago, Qwest acquired OnFiber, which is a provider of transport and Ethernet services to major cities outside of our 14-state environment, for example. For us, it’s about Qwest being able to reach more customers who are willing to do business with us. As Qwest looks around at the environment, we’ll look to make whatever acquisitions will benefit us and our customers.

This doesn’t mean that Qwest is planning to get bought out by Verizon, does it?

(Laughs) Even if I had knowledge of anything like that, I couldn’t comment on it.