Use Phidgets1052 rotary encoder with arduino

Hi everyone,

I was wondering if it's possible to use this sensor:

With the arduino instead of using the USB cable through phidgets interface?

It's 4 pins (red, black, green white) so I would assume it would be 5v, ground, and 2 pins for input (analog?)

Thanks in advance for any help you can give me!

Solder wires directly to the encoder switch pins, and work out how to provide it with power? The USB interface is of no use to the Arduino.