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October 10, 1999

Qwest Bets on VDSL for Broadband

By CBR Staff Writer

By William Fellows

When telephones meet silicon and applications, the infrastructure is the great enabler, according to Joseph Nacchio, whose Qwest Communications Inc is only too willing to sell it. And he’s betting that it will be a newly developed version of DSL, which runs over conventional telephone lines, which wins broadband access to the home.

Nacchio said that Qwest is buying US West to control the largest DSL player in the US and port it to the rest of the nation. Nacchio is specifically betting very high data rate digital subscriber line (VDSL) will be the main challenger to cable for broadband access into the home. Everyone can get on it because it is not a caching system, unlike @Home for instance. Moreover the conventional twisted pair copper wiring it supports can reach 4,000ft from homes to a fiber network like Qwest’s. No-one has the knock out punch, said Nacchio, it’s up for grabs.

The cable guys are saying they’ll win the race for broadband access to home but will they? No! said Nacchio, they’ve just got bigger public relations machines. Watch VDSL. VDSL offers a standard LAN speed of 10Mbps and a return path of 8-10 Mbps has been developed by BATM Advanced Communications Ltd, the Israeli network products company. Its presence will be much seen at this week’s Telecom ’99 in Geneva.

Nacchio is concerned that he’s fighting a duopoly, and says he wonders about the Federal Communications Commission’s attitude to the way the battle for broadband is developing. He says that Qwest is having trouble just finding a way of divesting its $300m of long distance business as it is required to do by FCC rules for its acquisition of local phone company US West to be sanctioned. Yet the FCC does not have a problem with MCI Worldcom’s acquisition of Sprint.

To Nacchio it appears the cable companies and the new Bell monopolies are trying to be a duopoly, that’s not competition. OK, so buying US West might be a case of if you can’t beat them join them, Nacchio said, but I’m somewhat discouraged, he said, referring to the FCC’s apparent attitude to the emerging duopoly. What’s clear is that the whole debate over which companies will supply broadband access to the home is political, he says, It’s not about technology.

Speaking at Internet World on Friday, Nacchio said the only way to get on in the new internet economy is to see what’s coming next and do it. There’s no point looking back for inspiration or looking to the present for confirmation.

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