Monday, January 14, 2008

Qwest to Support Over the Top Video

As posted here previously, Qwest plans to spend $300 million over the next two years to bring 20 Mbps VDSL to 1.5 million of its subscribers. It recently stated that it is doing this to enable these people to view streamed HD content over its broadband Internet service rather than devoting this bandwidth to a Telco IPTV service as ATT and Verizon are doing with their U-verse and FiOS TV services.

Qwest also stated that its resale of DirecTV satellite TV service has been quite successful and is quite satisfied with DirecTV as its video offering.

Qwest's strategy will give its VDSL subscribers significantly more Internet capacity than ATT's U-verse, which is limited to 6 Mbps today and 10 Mbps later in 2008. Verizon's FiOS can provide 15 Mbps today.

The questions with all of this is what the price will be. A FiOS 15 Mbps connection costs $65 per month today, which is pretty expensive. ATT has not announced its pricing for its 10 Mbps. I expect that Qwest will price its 20 Mbps service as a premium service that will put it beyond the budgets of many households. They can certainly sell it as a premium service and the additional revenue will defray the networking costs required to support HD streaming over its Internet service.

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