Qwest Communications International, a communication services provider, took a bold step Thursday requesting that the federal government use some of the planned economic stimulus dollars to expand high-speed Internet in rural areas.

 

The Denver-based company mailed the four-page proposal to President-elect Barack Obama’s transition team and to Colorado Governonr Bill Ritter.

 

In the letter, the company suggests that the government make an unspecified amount of money available to states, which would ask for bids from companies proposing to achieve 95 percent statewide availability of high-speed broadband (7-megabits-per-second or faster).

 

Some of the proposal was crafted by Chuck Ward, Qwest’s (News - Alert) Colorado president. He shared he’s optimism in the request and is pretty certain that the Obama administration will include broadband expansion in its proposed infrastructure spending.

 

“It certainly satisfies the stimulus program’s objective, and that’s putting people to work,” Ward stated.

 

However, Qwest is not sure know how much money its proposal would need, mainly because it is unclear what areas private broadband service providers do not currently to reach, according to Ward.

 

But what is clear is that the total cost of the proposal will be billions of dollars, at a minimum.

 

In 2008, Qwest spent $300 million on upgrading its existing broadband infrastructure in 23 cities to make its network there capable of offering between 7 mbps or 20 mbps download speeds.

 

Giving the greater distances, building a new fiber optic network to unserved areas nationwide, many of them remote, is very expensive.

 

Although the proposal is costly, Qwest contends that this spending will create thousands of new jobs and help protect existing telecommunications employment. In addition, such spending would help close the gap between metropolitan and rural parts of America.

 

Qwest’s letter reads: “...while many urban areas have multiple broadband service providers, competitive prices, and speeds in excess of 7 Mbps, many rural areas lack even the most basic broadband offerings.”

 

According to the company, 7 Mbps is the lowest broadband speed users can download movie and songs and manage other online video applications.

 

It has been a tough run for Qwest as of late. The company lost 77 percent of its value during the decade that ended on June 30, 2008. The shares peaked at $66 in March 2000, and bottomed out at $1.02 in August 2002 - a 98.5 percent drop.

 

After eight consecutive unprofitable quarters,CEO Joseph Nacchiowas abruptly ousted from his position in June 2002. In 2007, the ex-CEO was convicted on 19 out of 42 counts of insider trading. This past March, a federal appeals court panel reversed the conviction and ordered a new trial due to the exclusion of an expert witness in the original proceedings, reports reveal.

 

While the stock's price action is not as wildly unstable as it once was, Qwest is still struggling. The shares have dropped lower since June 2007, with resistance looming overhead from their 10-week and 20-week moving averages.

 

So what’s next for the telecom company? While many analysts predict the stock to double during the next year, Thomson (News - Alert) Financial says that the average 12-month price target on Q is $6.15. The stock has already proven to be capable of quick, substantial growth ... but the question remains: Can Qwest outperform on the up-and-up?