Overpriced and Anti-Competitive: The Dark Side of Qwest's Fiber

Much has been made of Qwest's announcement that they're rolling out their new FTTN network in Utah, but the media has missed some critical points regarding the dark side of Qwest's plans.

The first jaw-dropper is the sticker shock: $105/mo for 20Mbps/896Kbps DSL or $52/mo for 12Mbps/896Kbps DSL. Interestingly enough, these services are only initially available in parts of Draper, Salt Lake City and East Millcreek despite their claims that they are pushing hard to roll out access in UTOPIA cities and underserved areas like Woods Cross. The closest comparable service is a 30Mbps/30Mbps package from MSTAR running $50/mo. Not only is it faster than either of Qwest's planned DSL offerings, it beats both on price. When looking at bundles with phone service, Qwest will clock in at a budget-busting $146/mo for the top-tier DSL speed and unlimited long distance while MSTAR sips from your wallet at $74/mo, almost half that. While must is being made of UTOPIA's new installation fees, the savings pay for it after just 14 months with the Internet/phone bundle. This is a huge pricing differential that consumers must be made aware of.

The real scandal is what this will do for local loop competition. AT&T is building a network similar to Qwest and based on the same FTTN technology. Because it's fiber optics and not the old copper plant, they are no longer required to line-share with other providers. Qwest is doing the exact same thing. There will be no XMission, no MSTAR, no Infowest for your DSL provider in these areas; Qwest will be the sole retailer. Expect a similar picture when it comes to your phone service. Seem like paying $24M to kick out the competition was a steal for the incumbent.

This kind of market consolidation is bad news for Utah consumers.