Cable Makes Competitive Push on Broadband Speeds
Cable providers are rolling out faster broadband speeds as they battle telcos for customers. RCN has taken the lead with its broadband speed boost to 10 Mbps, announced just a week after Comcast kicked off the new year with faster residential speed tiers and a range of new services.
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“There is a lot of demand for this speed,” said RCN CEO Pete Aquino. “Our broadband customers will be able to do everything faster now -- from music downloads to gaming.” The higher speeds will enable RCN to offer more services to customers. For example, the company announced a new monitoring system that allows customers to install up to 4 cameras in homes or businesses to see what is going on while they are away. “We can provide a lot of bandwidth to the home,” Aquino said.
Comcast’s array of new services include video mail, digital photo storage and games on demand. Comcast offers speeds up to 6 Mbps and, like others, the company isn’t charging consumers for the upgrades, expected to be completed by quarter’s end. Time Warner Cable’s Road Runner service offers 3 Mbps and Cablevision in Oct. increased its broadband speeds to an average of 5 Mbps with a potential maximum of 10 Mbps.
“What these companies are trying to do is get to the promised land of content -- to do video streaming for instance,” said CTAM Pres. Char Beales: “Some of this is about bragging rights. Not a lot of them are using those features right now.” But the ability to offer higher speeds gives companies a competitive edge, she said: “Basically, it’s something consumers can understand.”
Meanwhile, Verizon’s fiber-to-the-premises (FTTP) service offers broadband speeds up to 30 Mbps, which could pose formidable competition for cable. Verizon has began building the fiber network in parts of Cal., Del. Fla., Md., Mass., N.Y., Pa., Tex. and Va. Besides offering voice and data transmission, the service can transmit video, but that part of the service is in its infancy. Verizon launched the service last year in Keller, Tex., a city outside Dallas-Ft. Worth.
“You're seeing quite a battle between the 2 industries,” said cable analyst Brad Wilson. He said each is trying to win customers with higher speeds or lower prices. For example, SBC just last week announced a price cut for its 3 Mbps broadband to $29.99 a month from $36.99 -- compared with about $55 for RCN’s broadband, sold on its own. However, the trend for most MSOs is to price broadband in bundles, which makes price comparisons harder.