Qwest CTO: Pieter Poll

Sumi Das: Pieter, thank you for taking the time to speak with us today.

Pieter Poll: Good morning Sumi, glad to be here.

Sumi Das: What's the size and scope of Qwest's business operations?

Pieter Poll: Qwest really operates business in two areas, but we think of it as very much an integrated business. We are what some would call an incumbent local exchange carrier in fourteen states in the Mid-West and western parts of the United States, but we also operate a nationwide business primarily focused at business customers. We are one of the top 10 autonomous systems globally in terms of the amount of Internet traffic that we carry. We offer four nationwide rails of DWM technology, so very much a nationwide player.

Sumi Das: Many people are saying that we are currently in a financial crisis at the moment. What steps is Qwest taking to weather this instability?

Pieter Poll: Well, certainly there are a lot of factors going on on a macro basis, which are not directly attributable to the communication industry. What we see as a company is that in the consumer market there is certainly a concern on the part of households as to how they are managing their household budgets. For example with increasing fuel prices, is there any way that I can modify my communications bill? That said, communications is actually helping some households in terms of their ability to stay in touch without getting in the car. From a business perspective we don't see it as much. What is going on in the business market is the businesses, more so than ever, realizing they are going to have to compete with each other and to compete with each other they need state-of-the-art services. We see no slowdown in that trend.

Sumi Das: Tell us where Qwest falls in the Net neutrality debate?

Pieter Poll: The Net neutrality is a very broad topic. First and foremost I would start off by saying that Qwest has a long history in the Internet and we fundamentally believe that applications should not be controlled or blocked in any case, unless there is question of legality. If required by court order, required for legal materials to take action, we will, as would any other responsible provider on the Internet. If we extend the debate a little further though, the key point about Net neutrality that we feel is the right for a carrier to have a two-sided business agreement. So the analogy is very much that if you are doing your Christmas shopping--pretty soon here we will be in the Christmas period--and you're calling several people for that sweater, if one of the people that you're talking to is going to offer free overnight shipping and they are going to throw that in the price, you might go with that provider because of the increased level of service. For the same reason, we feel that as a company we should have the ability to provide what we call a two-sided business agreement to provide a better experience for our customers, and in this case their customers as well.

Sumi Das: On October 1st Comcast introduced bandwidth caps of 250 gigabytes on all residential customers. Does Qwest have any plans to follow suit and introduce similar limits?

Pieter Poll: Currently we do not have any plan along the lines of what Comcast is doing. But I will say that the larger issue in the industry is, how do you continue to manage and keep the Internet affordable for all when there is great disparity in how some are using the Internet? Let me give you a couple of data points that I think show this out. First of all, on the Qwest network--and this is fairly typical for a residential customer--you see about forty percent increased usage per year in the amount of information that is downloaded. So if someone is doing one gigabyte this year, it's 1.4 gigabytes that they are projected to do next year. You can see that for carriers--if your costs for IP are not coming down at the same rate, forty percent per year--you are in a room, the water level is going up and it's only a question of when you are going to drown. The question is how do you manage that, and how do you manage that in an environment where the top one percent of users are, in fact, generating twenty percent of the demand? The key goal is to keep the Internet affordable for all. So I think what you see in Comcast and others is a recognition that you're going to have to start doing some form of traffic management to keep the Internet affordable for a large number of customers.

Sumi Das: So in other words you are not ruling out the possibility of bandwidth caps down the road?

Pieter Poll: We are not ruling out the possibility. Qwest, like most providers, has what we refer to as an acceptable usage policy. Our acceptable use policy is not based directly on a cap, but is rather based on a top percentile. We're talking about 0.001 percent or so of our total subs, for which we suggest that there are things other than residential broadband that are more appropriate for what they are doing.

Sumi Das: What is Qwest's edge over its competition?

Pieter Poll: Our edge I think--I could, first of all, describe a number of technologies--but I think when the day is done we're a company that remains very focused on the customer. We spend time with our customers, we are very reachable by our customers, and we are very nimble in terms of our ability to provide services quickly. I sometimes say, as a CTO, that I can't fundamentally improve Qwest by picking the right technology but I can certainly make things difficult for Qwest by picking the wrong technology. Technologies are available to any carriers and is very much like the airlines. It doesn't really matter so much if you are on AirBus or Boeing, it is a question of how the airline operates its service inside the airplane. I think it is that way with the communication carriers as well.

Sumi Das: Tell us about recent innovations that have been introduced at Qwest.

Pieter Poll: There are any number of things that I could talk about in the business market space. I could talk about our addition of what we call Ultra Long Haul Optical Technology. We already operate four nationwide rails of DWDM technology, but now what we have done is we've gone in with large number of drop points, about a hundred sixty or so drop points on a nationwide basis. That is essentially to fill the demand of what a lot of people are seeing in terms of increased demands for bandwidth. Now they can actually take a wavelength, a ten gigabits per second wavelength, as a currency of service. This is not just between traditional hosting or Internet peering locations but is available to a very large number of cities. In the consumer space, I would point to our investment of what we call fiber to the node, where we are bring out the fastest available public Internet service in North America--twenty megabits per second. We have a plan to increase that to thirty or thirty-five megabits per second range shortly.

Sumi Das: Why choose to go fiber to the node versus fiber to the home?

Pieter Poll: Sumi, that is a question that we get asked all the time. I think it is first and foremost a function of where you operate. A lot of carriers that are pursing a fiber to the home type of strategy are in areas where they have predominantly arial plant. The construction cost to the home are much lower than if you basically have to pick up a shovel and dig through people's yards and rose bushes and so on. The question comes up, though, is fundamentally fiber to the node--where we are talking about speeds in the twenties and soon to be thirty- thirty five megabit per second range--is in anyway a disadvantage from the speeds you could achieve in fiber? We don't believe that is the case. If we believed there was a shortcoming there for our customers we wouldn't make that sort of investment. You look at it from the perspective of high-definition TV. Typical high-definition TV streams at mpeg four in the eight megabit per second range. So what we are saying with those speeds is that you can have three simultaneous streaming high-definition events going on, plus have a ten megabit per second Internet experience on top of that. I think in terms of the information that people are consuming that pretty much fulfills the need. Should consumer needs be beyond the thirty five megabit per second range, we would absolutely move forward and make the investments to bring those speeds higher.

Sumi Das: Qwest plans to roll out a converged services framework called "Q Home" and among other things this will integrate its phone service with MSN. How will it work?

Pieter Poll: The "Q Home" experience--and we are very proud of this because I describe it as our first toe in the water of convergence, where we are providing value in terms of partnerships that we have, in this case our MSN partnership on the Internet experience--and what we are dong with "Q home" is, we are integrating that experience with our phone experience. If you have Microsoft's Messenger launched on you computer and you receive a phone call you are going to see a messenger pop-up that tells you about that caller ID information included. Your email is going to have call logs and if you get a voice mail, you are going to have an audio attachment to your email. So you can basically use the Internet to interact with your phone service. Typically, you would have to go to your phone and look at the phone's flashing light and pick up to retrieve your voice mail. Now you can do that with an email--you can control your features.

Sumi Das: Qwest had a very busy summer; it was tasked with wiring both the Republican and the Democratic national conventions this year. What are the challenges of laying cable for an event that requires such an extraordinary amount of bandwidth?

Pieter Poll: Great question, in fact Qwest is very proud that we were the official communications provider of both the Democratic and Republican national conventions in Denver and St. Paul. There were significant challenges associated with both. I think both of these conventions, for their respective parties, were the most wired conventions in history. We placed record amounts of fiber and data capacity into those venues and they made sure those services where available essentially in an on-demand basis. I think the results speak for themselves. The parties were very thrilled with the services that they received. I think it was a resounding success.

Sumi Das: Pieter, thanks for taking the time to speak with us today.

Pieter Poll: Sumi, thanks for the opportunity.

Sumi Das: I have been speaking with Pieter Poll, CTO of Qwest communications. For CIO Sessions, I'm Sumi Das. Thanks for watching.