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Qwest Gets Salt Lake City Video Pact

11/22/2005 5:56 AM Eastern

Qwest Communications International Inc., which has been quietly offering video service in three markets, appears to be getting more active in that business.

The telephone company has been granted a franchise to deliver video in Salt Lake City, over the objections of Comcast Corp. The incumbent is most alarmed about language in the telco’s franchise that does not compel a complete build-out of the community unless Qwest reaches 51% penetration with its video services.

Comcast contended that Qwest would never reach that level of penetration and, therefore, it would never have to serve the entire city. The cable firm wanted the city to compel a build-out in three to five years.

But a city staff report on the competitive franchise indicated that the 51% build-out requirement eliminates a “significant barrier to entry” to new providers in the city.

The Salt Lake City Council, by a 6-1 vote, approved a 15-year franchise for the telco Nov. 17. Qwest pledged to provide advanced services such as video-on-demand and HDTV.

Qwest also has a partnership with DirecTV Inc. to sell direct-broadcast satellite services bundled with phone products.

Comcast’s franchise is up for renewal. Local executives complained to the city about their lack of notice of the talks with Qwest. Comcast officials feared that they will be compelled to comply with deal points they had no part in negotiating.

No start date has been set for construction of Qwest’s video business, nor has the company decided on the technology it will use, Hancock said.

Qwest currently offers video in Denver suburb Highlands Ranch, Phoenix and Omaha, Neb. The company declined to state its subscription numbers for that service. The customers in these three markets are served using very high-speed digital-subscriber-line technology (VDSL).

Qwest is also deploying fiber-to-the-home architecture in Lone Tree, Colo., and South Jordan, Utah. No subscribers are being served as yet in those two communities, Hancock said.

And Qwest is in negotiations with the Greater Metro Telecommunications Consortium, which represents 30 communities, including Denver.

September