Qwest chairman and CEO Dick Notebaert tried to convince an audience at the VON Conference last week in San Jose, Calif., that his company and the other Tier 1 carriers have more in common with the disruptive start-ups and innovators in the IP networking arena than they might think. And the highest common denominator is wholesale services.

Notebaert urged cooperation on commercial agreements as the first step to solving the thorny issue of Net neutrality and a way to stave off the unnecessary regulation that would result without such self-imposed agreements.

He said he understood the position many folks in the VON audience had taken concerning traditional carriers role in the Internet. “But honestly, there is far more areas where we occupy common ground that people realize,” Notebaert said.

He nearly won the crowd over with a pledge not to block any Internet traffic, including to content sites that may compete with content Qwest itself would provide. However, the audience was more skeptical of what they perceived as a two-tiered network where content providers would have to pay more to ensure quality of service and sufficient bandwidth.

“If there is any message we should take [from here], it is that it is not about you or me. We are not just competitors, but suppliers,” Notebaert said.

Qwest’s wholesale division, which supplies bandwidth and access for VoIP providers, is critical to the company’s success and it is important for everyone to know how intertwined they really are, Notebaert said.

“The vast majority of feedback from the VoIP providers we do business with is that we are right where we need to be in the TDM space, and that translates to [the need for] commercial agreements. Commercial agreements are key [to success], not regulation,” Notebaert said.

The goal of commercial agreements is to strike a balance where both sides win, according to Notebaert. And he pointed out that outside of Qwest’s 14-state region it was just like any other provider trying to get bandwidth and access at a fair price.

“With commercial agreements, there has always been give and take. But if one side wins and the other loses, it doesn’t work,” he said.

He reiterated that the industry has always sold bigger pipes for those with the wherewithal to purchase them and those who want to add a little differentiation in their services. He said that not only are other providers taking a position that they shouldn’t have to pay for bigger pipes and higher quality assurance, some of them will not even discuss the issue as it pertains to Net neutrality or commercial agreements.

“I realize this is a sensitive [issue], but some broadband providers prefer to completely duck this topic. Time Warner refused comment, and Cox had not made a statement about commercial agreements,” Notebaert said. “We ought to let commercial agreements address this issue, and the government ought to stay where the government is. We want to be able to continue improving speed and service level agreements and giving people a better experience.

Qwest has refocused its energy on doing just that for its wholesale customers with the launch in January of a new suite of next-generation services for wholesale customers called Qwest IP Solutions, a wide-area networking (WAN) offering based on Qwest’s nationwide multi-protocol label switching (MPLS) network. It includes VoIP and real-time streaming multimedia services as well as features such as: Private Port, a reliable WAN connectivity between customer locations; Enhanced Port, which adds Internet access and QoS prioritization options; and port speeds up to 2.4 Gb/s.

Qwest’s IP terminations business grew 900% in the last six months of the year, according to Derek Koecher, director of sales operations and business development for global wholesale markets at Qwest. Seventy percent of that came from new business, and the other 30% from customers transitioning to IP.

“We hope to see that at 50/50 by the end of this year,” Koecher said.

Notebaert said the company’s wholesale services were always based on quality and that customers are used to paying for that. He sees no reason to change because some service provides are unwilling to pay for extra bandwidth.

“It staggers me. I can’t believe people can put this idea forward with a straight face,” Notebaert said. “My job has never been to degrade service or give any customer less capability than they asked for or paid for. I can’t have a customer wanting to buy a DS-3 and say, ‘OK, but we’ll have to slow it down for you because your competitor only wants to buy a T-1.’”

Jason McCabe Calacanis, CEO of Weblogs, which was acquired by AOL, didn’t think much of Notebaert’s rationalization of commercial agreements and their relevance to Net neutrality. He followed Notebaert’s speech by saying, "I think I will kill myself after that Net neutrality discussion. What is this, 1997?"

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