News that US operator Qwest Communications said boldly this week that it would offer 40 Mbps high speed broadband to customers in Denver, Tucson, Salt Lake City, and Minneapolis/St Paul followed rapidly by 23 further markets, including some in New Mexico, Oregon, Utah and Washington was greeted with some skepticism.
The Washington areas getting 40 Mbps will include Seattle, Tacoma and Vancouver where it can finally go up against cable operator Comcast with something that might actually scare it. Unfortunately the announcement could barley be heard for the sound of Comcast and Verizon executives laughing up their sleeve. Right now those parts of the Comcast territories are still on DOCSIS 1.1, and it could kill any Qwest response stone dead if it upped that to DOCSIS 3.0 and kept the price the same, while Verizon has its FiOS service on the edge of neighboring territories.
One Qwest ‘fan’ site we visited suggested that the decimal point had been moved and that Qwest was testing either 4 mbps or the service working for 40 hours in a row without an outage, rather than 40 Mbps.
But pundits are wrong to blame Qwest. Just go look at a map of the Qwest territories. This is the equivalent of taking broadband to the Russian Tundra or Siberia.
These are not called the square states for nothing ‘ like parts of Africa it looks like they were divided up by straight lines because no-one could possibly travel the length of the state and bother to put towns inside our outside of any specific borders.
Take one of the very squarest states like Wyoming. Parts of it have a population density of 5 people per square mile against a national average of 80.
Qwest territories in South Dakota have around 15, with 17 for Montana, 23 for Nebraska, 52 for Colorado, and 156 for Utah, the only one above the national average. And remember that national average is brought down to that level by places like Wyoming, South Dakaota and Montana, so all the other phone companies have huge populations in territories which can be used to subsidize build out in rural areas. In Qwest it’s the other way around.
If you were running Qwest for shareholders, what would you do? You can spend time and money getting everyone in the entire territory up from 1.5 Mbps to 4 Mbps, or you could spend it focused on getting 40 Mbps to those which you can reach. The answer of course is that you spend your own money on the high speeds which are going to attract new customers and high margins, and hold your hand out for government support for the rest of the territory.
When you look at traditional DSL it is good for about 6.5 kilometers or 21,000 feet for some kind of signal, but all the high throughputs come in built up urban areas where loop lengths often average as low as 2.5 kilometers or considerably less. It is obviously these which are being targeted by Qwest. In fact the very fact that it is using VDSL for the new lines means that they loop lengths must be under 1.6 km (1 mile or 5,280 feet) otherwise it might just as well stick with ADSL2+ and go for a 20 Mbps service, because at 1.6 km that happens anyway.
So for instance the average loop length in Qwest’s Wyoming territory is around 19,078 feet but in some of its sparser rural areas it can go as high as 84,575 feet which means no broadband is possible at all on those lines without some form of expensive intermittent booster.
To solve the overall problem of broadband for Qwest customers they might look at a series of boosters and splitters as one answer, but far cheaper is likely to be a series of WiMAX base stations, strung together with wireless fiber, spraying the signal 6 or 7 kilometers either side of a straight spur. Of course if Qwest had a cellular service to backhaul it might have a series of towers in place for such services throughout its territory, but it sold off its cellular services to Verizon.
Qwest could send up its own satellite and use it purely for broadband provision, but the economics are the same.
We’re sure that Qwest has looked at such radical answers but they cost money and we come back to those economics, that even if a home was to pay you for mobile phone usage for three or four people, two or three broadband connections, VoIP and IPTV, that still will still come to less than $200 a month (and many people in those territories could not afford that) but that will take 20 years or so to pay of the debt incurred on building out such an infrastructure, at that rate.
So right now the poor executives at Qwest can be forgiven for focusing on investment in areas where rivals such as Comcast have found it economic to build out. But when it does that Qwest gets criticized for ignoring rural areas. So we see this as a simple formula, Qwest should use its own money 40 Mbps for the people it can reach with VDSL (because it will get a return) and it should annex the entire US broadband stimulus fund of $7.2 billion for the rest of its territory and spend it on radical new technologies.
In fact if anything much different from that happens, Qwest will end up having to be sold to one of the other two remaining RBOCs ‘ Verizon or AT&T ‘ neither of which want to be burdened with its problems, or more likely they will end up with the most profitable parts and some smaller entities to inherit the rural problems.
Notice that Qwest may have introduced the 40 Mbps lines, but it has not yet added an IPTV option and probably won’t, since at these speeds internet video should be fast enough so it can avoid that investment.
The new service will be 40 Mbps downstream with 5 Mbps upstream, will start at an alarming $100 a month when combined with a fixed phone package and if your line will support 40 Mbps downstream and 20 Mbps upstream, then Qwest will want $110 a month.