The Telecommunications Law Resource Center is the most comprehensive reference and news platform for communications law, covering broadcasting, cable, broadband, telephony and wireless;...
By Tim McElgunn
April 3— True residential gigabit competition in the U.S. is now a reality in a major metropolitan area.
With an April 2 announcement, Comcast Corp. has started a broadband arms race that could force a huge and rapid increase in capital spending by anyone who hopes to keep up.
Within the coming months, the company will offer a 2-gigabit-per-second “Gigabit Pro” Internet service to 1.5 million residential consumers living within about one-third of a mile of an upgraded fiber node in the Atlanta metropolitan area. An additional 17 million or so homes in Comcast systems across the country should see the same offer before the end of 2015, the company said April 2 in a blog post.
The nation's largest cable operator and Internet service provider (ISP) is preparing to build fiber drops from nodes serving as many as 18 million homes, starting with Atlanta. Nationwide, Comcast passes a total of about 55 million homes.
The move, in part, is likely intended to help convince regulators that the added size and scale of a combined Comcast/Time Warner Cable Inc. will result in significant public benefit.
However, the move does appear to contradict claims by Comcast and others that the Federal Communications Commission's decision to reclassify broadband Internet access service under Title II of Communications Act will chill investment.
Regardless, Comcast's move is a game changer. And, when Comcast makes moves this big—whether launching high-definition (HD) video, high-speed data and voice, or commercial services and Wi–Fi hotspots—they often mark the “starting gun” for widespread advanced services competition in the U.S.
The new services won't be delivered initially over DOCSIS 3.1 “Gigasphere” facilities, since the gear required to deploy DOCSIS 3.1-standard service offerings will not be commercially available until sometime next year.
That likely means that the company will leverage metro Ethernet infrastructure it has already put in place to serve businesses—and to deliver special-order Extreme 505, its asymmetrical 505 Mbps downstream/65 Mbps upstream residential service.
Comcast presently delivers Metro E in 26 of the nation's largest metro areas.
Metro E is scalable to 100 gigabits per second (Gbps), with 10 Gbps typically offered as the top speed for point-to-point connections, and the technology can easily handle a 2 Gbps symmetrical connection. But, similar to Verizon Communications Inc.'s FiOS, Ethernet drops to individual homes will likely be built only after a contract is signed.
DOCSIS 3.1, on the other hand, is expected to be ubiquitously available across cable operators' networks using existing hybrid-fiber coaxial drops.
Comcast is likely to first target cities where it faces current or emerging competition from Verizon's FiOS, AT&T Inc.'s U-verse with GigaPower and/or Google Fiber, as it does in Atlanta.
In Atlanta, depending on which areas of the metroplex Google ultimately chooses as Google Fiber “fiberhoods,” residents may see two competing gigabit offers arrive in their physical or electronic mailbox in coming months. That scenario may also play out in Salt Lake City, where Comcast also competes with Google Fiber.
And a third gigabit option in those cities—and others—is well within the realm of possibility.
In Atlanta, AT&T will be forced to quickly respond to Comcast and Google Fiber, accelerating and expanding its plan to deploy its own gigabit entry, U-verse with GigaPower.
In Salt Lake City, as Comcast joins Google Fiber in offering residents a gigabit connection, CenturyLink Inc. is likely to accelerate expansion of its gigabit footprint as well.
Comcast has not named any city outside of Atlanta or published a deployment schedule for the new service. Nor has it released pricing, saying only that Gigabit Pro will cost less than its Extreme 505 offer.
And its decisions there may prove as disruptive as the decision to roll out the service itself.
Comcast's offer will be coming into a market where a standalone gigabit connection from Google, AT&T or CenturyLink—or for that matter, C-Spire, municipal fiber networks, and many others across a limited number of cities and neighborhoods—costs about $70 per month.
Comcast charges $399.99 per month for its Extreme 505 service in markets where it faces little to no competition for its top speed tier.
Outside of FiOS markets, Comcast will continue to face limited to no actual competition for most of the 18 million homes it will target for Gigabit Pro. Google, AT&T CenturyLink and others are all following a “fiberhood” phased deployment model.
Nonetheless, it will face a marketing onslaught if it comes in with a price significantly higher than about $200 per month for the top end of its new service.
Bloomberg BNA's Broadband Advisory Services expects that the company will start its pricing at $100 per gigabit per month for the new service and leave its lower-speed-tier pricing intact for now. Given the extremely high margins provided by high-speed data services, the company should also have plenty of room to offer promotional discounts on those lower speed tiers if the market forces it to do so.
To contact the reporter on this story: Tim McElgunn in Cherry Hill, NJ at firstname.lastname@example.org
To contact the editor responsible for this story: Bob Emeritz at email@example.com
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to firstname.lastname@example.org.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to email@example.com.
Put me on standing order
Notify me when new releases are available (no standing order will be created)