Blog Post

Qwest, looks at its Bell past, for its future

Edward A. Mueller, a veteran of the Bell system and most recently the CEO of Williams Sonoma, is going to replace Richard C. Notebaert as the chairman and CEO of Qwest Communications (Q), the company announced a earlier today. Notebaert announced in June that he would retire on August 15, 2007. Mueller’s appointment shouldn’t come as a surprise. Mueller and Notebaert share a common heritage.

The 60-year-old executive has deep bell roots – he was the president and chief executive officer of Ameritech from 2000 to 2002; president of SBC International Operations from 1999 to 2000; and president and chief executive officer of Pacific Bell from 1997 to 1999. He joined SBC in 1968 and at one time was the president and chief executive officer of Southwestern Bell Telephone.

Mueller takes over Qwest at an interesting juncture for the tiniest of Baby Bells. Notebaert’s low key management style helped the company recover from the excesses of the go-go 1990s, and stabalize its operations. The recent upswing in demand for bandwidth, strong demand for DSL services and fiscal discipline have helped Qwest get a firm footing, at least for now.

There are some dark clouds on the horizon. The new housing boom, especially in some of Qwest territories such as Colorado and Arizona has started to peter out, and might eventually cause a slowdown for the real “baby” Bell. The company will at some point have to decide whether it wants to mop-up other smaller regional players, or throw in its lot with one of the two large Bells, Verizon or AT&T.

2 Responses to “Qwest, looks at its Bell past, for its future”

  1. Om

    Surprised at your thought “hether it wants to mop-up other smaller regional players, or throw in its lot with one of the two large Bells, Verizon or AT&T.” That would imply they are too small to reach economies of scale. But they are a $13B per year company, plenty big to spread their costs and buy in large volume. In the case of Verizon, I have a feeling it got too big, and is therefore less efficient.

    Qwest merging into AT&T or Verizon is particularly bad public policy. Competition on the Internet backbone has declined drastically, with 4 or 5 companies dominating in the U.S. Prices haven't gone up, but with fewer companies we may have issues of market power. Am I wrong?
    

    db