Another very interesting report from mnispel
SCIENCE OFFICER REPORTING: QWEST
This is a continuation of the last science report although not directly related. It is a simply an overview of facts regarding the development and implementation of QWEST's new US domestic fiber optic network. It does not relate so directly to DGIV but should be considered a partial snapshot view of the rapid developments going on in telecommunications and signs that the future holds far more changes than we can now imagine.
QWEST is a company with the ambitious plans of implementing a 16,000+ mile fiber optic network that will serve more than 125 cities which represent 80% of the data and voice traffic in the United States. Cost - $2 billion. The network will be made with the most current fiber optic technology, will be a bi-directional line switching OC-192
SONET ring architecture. Quite interestingly, QWST is implementing their network by buying right of way from railroads across the country. The right of ways granted the railroads that played such a role in the development of our country in the last century are playing a major role again in the development of domestic communications. Notice the references to the railways on DGIV's home page - quite interesting.
QWEST's plan started out basically quite simple - BANDWIDTH, BANDWIDTH, BANDWIDTH: build it and they will come. QWEST is selling bandwidth in the form of data and voice channels already implemented as well as dark fiber directly. They must have buried a lot of fiber. As of now, only slightly more than one quarter of the network is up and running. It is due to be complete later this year.
Nevertheless, on February 10, 1998, QWEST announced that they would offer a service called Q.talk in nine different cities - 7.5 cent LD 24 hrs a day, 7 days a week. Ouch ATT and MCI.
After February things really have become exciting. First, on March 9, QWST announced it would acquire LCI International in a $4.4 billion deal which will make them a full service hardware/software telecom company. This merger will take some time to complete but is due to be done this year.
In addition a virtual flood of contracts and other announcements have flowed since February, which has been termed a "fiber-Optic feeding frenzy."
Feb 17 - US West forms alliance with QWST to deliver data services nationally.
Feb. 18 - $70 million contract with Intertel
Feb. 24 - Assorted $12 million multi-year deals
Feb. 26 - $107 million 5 yr. contract with Cable & Wireless (CWI).
Mar. 18 - $35 million assorted contracts
Mar. 26 - They acquire Eunet International - a leading European ISP operating in 13 countries - for $154 million
Mar 31 - They acquire Phoenix Network - long distance service provider. $75 million
Apr. 1 - $100 million 7 yr contract with Verio Inc. - another large US ISP
Apr 7 - Agreement with Global Crossing to swap bandwidth capacity between the US and Europe.
Apr 9 - QWST chosen as a backbone services provider for the new Internet2 project - Who knows what this will ultimately mean.
Apr 27 - $430 million 10yr contract with the US govt.
May 4 - $60 million in assorted contracts
And most exciting:
May 7 - QWST and US West, one of the baby bells, make an agreement to offer LD to US West customers. 10 cents / min all day every day! Of course this makes ATT and MCI angry because US West isn't supposed to be able to offer LD services unless they let the LD companies offer local services in their territories. Ah, but apparently the law doesn't speak directly to this situation where QWST isn't a labeled LD carrier. $100 - $200 dollars in 1999.
May 14 - QWST and Ameritech, another baby bell, agree to offer LD services to Ameritech customers. 7 cents / min evenings and weekends/15 cents during the day for all domestic LD calls! Another $100 - $200 million for QWST.
And just this past week - ATT and MCI announced they were suing QWST and the baby bells to stop the above agreements - The pain, the pain!
Folks, things are moving fast and furious! If the latest agreements between the bells and QWST are allowed to stand the pain to the LD carriers is going to be sharp and long lasting. Look for other baby bells to sign up. The big LD companies will have to push the technology forward and find ways to offer cheaper rates. Those who are in place with the newer technologies stand to benefit in the exchange of minutes. DGIV is in the right place at the right time. They are making impressive moves and we can expect impressive things - assuming one thing - money. Assuming all we've heard from macker and byron about deep pockets available to DGIV are revealed as true, which to all appearances seems to be quite likely, then DGIV, as we all already know, should do very very well.
Here's to the future revealing where DGIV fits among all the historic changes occurring in the telecom industry in these days.
Mark N.
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