Cable vs. Telco: Still a Fun Fight

Carl Weinschenk

AT&T and Verizon took different routes when they designed their FiOS and U-verse fiber-projects, respectively.

 

U-verse is fiber most of the way, but in many of its builds the last leg - from somewhere near the premise, but not quite there - is digital subscriber line (DSL).

Verizon began with the Cadillac (or Lexus) fiber-to-the-premises (FTTP) approach that was more expensive to build but promised enough wiggle room for new services and features well into the future. It backed off, however. Tim Lee at Ars Technica points out that Verizon has abandoned FTTP, so DSL is a key for Verizon as well.

 

Despite the about-face, Verizon has enough headroom - either through the earlier all-fiber builds or advanced DSL techniques that came later - to make a strong competitive move. BusinessWeek/Bloomberg reports that it is doubling its broadband speed to 300 megabits per second. The story suggests that the move may be as much about marketing as real need:

The new top speed, up from a previous high of 150 megabits, is designed to let consumers handle multiple Internet devices and more bandwidth-hogging applications. Still, most home Internet customers probably won't notice the difference when they reach that level, said Jonathan Atkin, an analyst with RBC Capital Markets in New York.

The big competitor to Verizon and the other telcos is the cable industry, of course. Cable is rolling out its DOCSIS 3 technology, which is designed to squeeze, cajole and slice and dice its coaxial cable to stretch bandwidth and associated functionality.

 

It's a fun fight. While Verizon is speeding FiOS, AT&T is not out of the game. Despite the requisite complaints - this piece reads like the critique of cable operators of a decade ago - it is scoring victories in places like Ottawa, Kan. and in the new community of Civita, which is in San Diego. It beat Cox and Time Warner Cable for that deal. It also is forcing its subscribers to upgrade to U-verse.


 

There is a tremendous amount of competition between cable and telephone companies. They not only have to fight each other, but also worry about suddenly competitive LTE providers. The result is lower prices and better services for subscribers. Verizon's announcement is evidence that this really is the case.



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