While Qwest has skimped a bit when it has come to upgrading their network, they've been more than generous when it comes to executive compensation. According to the Associated Press, Qwest will be cutting back on extra $50-$70k yearly "flexible benefit payments" paid to the company's CEO and other executives which are used for "such things as financial counseling, physical exams and club memberships." Mueller received $11.4 million in 2008, $6 million less than in 2007. Also under fire by investors is the way the telcos pay for the homes of executives who move, notes Reuters. In AT&T CEO Randall Stephenson's case, that equated to an extra $1.7 million bonus in addition to the $11.6 million he earned last year in salary, stocks and other compensation.

Update: AT&T offers us a little more context on how they help executives with moves:

Unlike AT&T and Sprint, Qwest doesn't have a wireless division, and so they miss out on cash cows like overly expensive text message revenue, which in turn impacts their ability to upgrade their network and offer competitive bundles. They've tried to counter this by signing partnerships with wireless partners, with mixed results. For a while, Qwest was offering re-branded Sprint wireless phone and EVDO service as "Qwest Wireless" -- albeit with a $5 premium any user could avoid by simply signing up with Sprint directly. Qwest scuttled that partnership in May of 2008, and decided to simply offer Verizon Wireless services. They've now issued a press release reminding customers the original Sprint-based service will be shuttered in sixty days.

Wireless carriers have recently started subsidizing netbooks in much the same way they've subsidized smart phones -- assuming users are willing to sign long term contracts. Terrestrial operators are now getting into the act as well, with Verizon recently announcing a promotion that gives users a free Compaq Mini Netbook if they sign up for DSL. Qwest has now jumped on that bandwagon as well, their website now advertising that users who sign up for 7Mbps "fiber optic Internet" (Qwest code for DSL) get a Dell Mini Netbook for the subsidized price of $199. To get the discount, you of course need to sign a two year contract.

Qwest has unveiled a new $80 a month bundle package that includes 7Mbps DSL, DirecTV's "Choice Xtra" TV package, and unlimited and nationwide calling. As Bernie Arnason at Telecompetitor notes, there's a few caveats. Customers must sign a two-year contract, some of the bundle discount involved rebates, HD video content is $10 more per month, there's obviously a lease involved with the DirecTV gear, and you need to pay a $19.95 handling fee. Nudging the price below the fairly standard industry $99 fee is a good sign that Qwest, whose ability to upgrade their network is limited, is seeing increased competition from cable operators. One problem? Many Qwest customers still can't get faster than 1.5Mbps.

Qwest has issued their second quarter earnings, which indicate the baby bell reported a net income of $212 million, compared with $180 million one year ago. Revenue sunk slightly more than expected by 8.6%, down to $3.09 billion. Of course continued landline losses are a major reason why, the number of Qwest lines in service falling 11.8% to 7.29 million from 8.23 million a year earlier. Qwest added 34,000 broadband and 21,000 DirecTV customers on the quarter.