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This kind of integration between wireline and wireless services sounds great. But AT&T and Verizon (Wireless), which own their own wireless infrastructure, haven't been able to do this fully yet. It's also proven difficult for Sprint and the cable operators, which are in a partnership somewhat similar to what you are suggesting, to really achieve tight integration between wireline services and wireless services. So why do you think that Qwest can do it?
Mueller: First, we are good partners. Second, I think it's way too early to say it can't be done. Just because others have not done it doesn't mean it's something we shouldn't look at. I think it's something yet to come.
I'm not saying that because others haven't done it, it's impossible. But it's proven to be a difficult task for even one company that owns both wireless and wireline assets. So why would Qwest, which doesn't own any wireless infrastructure and will have to rely entirely on a partner for that piece of the service, be able to deliver this better or quicker than the others?
Mueller: I think there is more to come. Broadband wireless is going to change the face of the way we do business. We haven't even seen the applications to come. We don't even have the bandwidth in wireless yet to have a significant go at it.
I think that's coming. It's within our eyesight. You've got the 700MHz auction. You've got WiMax--Sprint and Clearwire, whatever they decide to do, if they do it together or on their own. That is going to enable a lot.
I like our position there because it really isn't out there yet. We get to play at the front end of this and not the back end.
Qwest sold the last of its wireless assets in 2004. Looking back, was that a mistake? You say you like your position, and yet your position is that you don't own any of your own infrastructure.
Mueller: I like our position in the market. But one is an economic choice, and one is a market choice, OK? Now, I can't comment on whether it was a mistake. I wasn't here when the assets were sold.
Richardson: The assets had such limited coverage and didn't meet the needs of the marketplace because it didn't have nationwide coverage.
You mentioned Sprint and Clearwire, and their efforts to build nationwide WiMax networks. Would you be willing to invest in helping them build a nationwide WiMax network?
Mueller: I doubt it. I mean, it would have to be powerful economics for us.
You also mentioned earlier today wanting to partner with whoever wins spectrum in the Federal Communications Commission's 700MHz spectrum auction. What kind of partnership would Qwest have with a company that wins this spectrum? Would Qwest lease the capacity and put together its own network?
Mueller: All I meant by that is that there could possibly be another wholesale network that comes out of that auction. We obviously aren't bidding on the spectrum, so we aren't looking to be an investor in the spectrum or the build-out.
We just think there are going to be more big wireless-broadband networks. It won't be just Sprint or Clearwire and WiMax. Possibly, it could be AT&T and Verizon, or a third party that comes out of this. So we would look for anybody that we could be partners with and retail off their network.
Let's shift gears here for a minute to broadband. You talked about Qwest's commitment to upgrading its network by taking fiber to the node or fiber to the neighborhood. Why doesn't Qwest follow Verizon's lead and just take fiber to the home?
Mueller: It's too expensive. We don't see the return.
But Wall Street seems to have looked favorably on Verizon's strategy, and it's starting to pay off. They seem to have a long-term vision.
Mueller: We don't have the resources.
Aren't you worried about commoditizing your network by not offering services like TV?
Mueller: No, that is what we have DirecTV for.
Yes, but you are relying on another company to offer a service to your customers. And you are just providing the transport.
Mueller: We like them.
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