The widening speed war in broadband
Dear Vorticians,
Some weeks ago, I wrote about a price war emerging in broadband access, but there's also been a relatively quiet throughput war heating up among the providers.
I was prompted to look into this by a fairly widely publicized report from Reuters about a Finnish company named Teleste that is promising to roll out 100M bit/sec broadband access over cable TV plant in 2006. The company's technology is reported to be in trials in Europe.
The conventional wisdom has always been that speed was a key weakness for cable in its battle against DSL. Some flavors of DSL promise to go far beyond what's offered by today's cable modems (my Comcast connection is currently advertised as offering speed up to 4M bit/sec) so a kick up to 100M would be quite a coup for the coax network (wait, there's a catch.) The DSL providers have gotten more aggressive on pricing lately, but the cable companies are also getting aggressive - on throughput.
Case in point, in my area of the world, Comcast is now offering teleworker and small business packages that range between 5M and 7M bit/sec, far beyond basic DSL but equivalent to a business DSL offering from Verizon. Both are priced in the $200/month range. Adelphia's Extreme High-Speed Internet hits 16M bit/sec download speed (with a 2M upload), a service for which I could not find a monthly price, and Cox cable offers 15M. Teleste's promises aside, the cable industry's DOCSIS 3.0, on its way to standardization, already calls for throughput of 160M bit/sec up to gigabit speeds. That would compare favorably with the Bells' fiber-to-the-home (FTTH) efforts that call from 30M to 100M bit/sec or more (not to mention the massive rewiring job that the Bells face to actually get fiber to all those homes).
But lest you think that cable is gaining, keep in mind that these efforts can't negate the real shortcoming of the cable plant: it's shared.For example, according to Dave Burstein of Broadband Reports, a sharp and witty gentleman who spoke at Vortex a couple years back, the 15M service offered by Cox is really a 38M network shared by as many as 100 customers. What do you think your odds are of actually getting 15M?
Vortician Burstein does a great job laying out how broadband is advancing in the U.S. and abroad and what limitations all the providers face - including those newcomers pushing WiMAX. I strongly recommend taking a read on this piece if you want a better understanding of just who can do what and what isn't really feasible.
As independent ISPs go the way of the passenger pigeon, we're stuck with what amounts to a duopoly in broadband access in the U.S. But it's encouraging to see that the cable companies and Bell companies are actually competing rather robustly right now. The DSL providers are trying to grab back as much market share as they can, having lost the early broadband lead to cable, while cable races to get ahead in the speed war before the Bells make good on their investments in FTTH. FTTH is particularly threatening to the cable companies because it not only ratchets up the access war, it provides a terrific mechanism for IP television - which stabs at the very heart of the cable empire.
As I've said, these price and throughput wars benefit us, the consumers, and the advance the cause of broadband deployment far better than lofty pronouncements and sketchy legal/regulatory strategies about how the U.S. is falling behind in high-speed Internet.
Your thoughts?
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