2009 - Lots of Bandwidth?

Yesterday, Comcast announced 50Mbps service in Baltimore, Chicago, Atlanta, and Fort Wayne, Indiana. The service is being offerred over upgraded DOCSIS 3.0 tiers and will initially cover only parts of the listed cities.

The company is offering two new residential tiers:

• Extreme 50, offering up to 50 Mbps of downstream speed and up to 10 Mbps of upstream speed at $139.95/month.
• Ultra, offering up to 22 Mbps of downstream speed and up to 5 Mbps of upstream speed at $62.95/month.

And two new business class tiers:

• Deluxe, offering 50 Mbps / 10 Mbps tier for $189.95/month, which includes a full suite of features and support.
• Premium, offering speeds up to 22 Mbps / 5 Mbps for only $99.95/month.

The company says they will complete upgrading these cities early next year and will continue to roll out high bandwidth (what Comcast is calling wideband ) services at a rapid pace.

With the cable companies rolling out these tier levels we should see the telcos (Verizon and AT&T especially) respond pretty quickly. If you are fortunate enough to live or work in an area where there is this kind of broadband competition 2009 should be a nice year - you'll be seeing some very nice service offerings as the cable companies and telcos go after your business.

Cable Companies Moving Fast With DOSCIS 3.0 Products and Services

There's been a lot of DOCSIS 3.0 activity recently as the cable companies move rapidly towards bandwidths of 100 Mbps and greater. In April 2007, CableLabs, the cable modem certification consortium, accelerated their certification plan time-line and we're now seeing certified products at deployable levels. Earlier time-lines did not have product reaching deployable levels until late 2008 or early 2009.

Key to this accelerated certification plan was CableLabs decision to "tier" feature availability for product manufactures with the following qualification levels:

Bronze Qualification: Supports IPv6 and Downstream Channel Bonding

Silver Qualification: Adds Advanced Encryption System (AES) and Upstream Channel Bonding

Full Qualification: All DOCSIS 3.0 Features

This tiered level of certification is expected to be dropped in early 2009, when all cable modems will need to have "Full" qualification.

Today (a little over a year later) we're seeing nice results from the accelerated time-line. Here's a couple of quotes from a recent Cable Digital News interview with Time Warner Cable president and CEO Glenn Britt:

Time Warner Cable conducted some Wideband tests in Austin, Texas, last year, "and it works fine."

While 100 Mbit/s seems to be the early sought-after speed benchmark for DOCSIS 3.0, Britt said he's seen it deliver speeds up to 200 Mbit/s, albeit in a lab setting.

Britt also said Time Warner will begin testing Docsis 3.0 in New York "later this year" and roll out DOCSIS 3.0 more widely in 2009 and 2010, "in response to demand." We'll see if Time Warner accelerates the New York City roll-out in direct competition with Verizon's New York City FiOS roll-out.

Comcast is also moving fast with DOCSIS 3.0, having launched the service in the Minneapolis area and working to have as much as 20 percent of its footprint DOCSIS 3.0 ready by year's end.

Will The Cable Companies Build a Mobile Broadband Network?

Scott Moritz wrote an interesting piece at CNNMoney/Fortune titled Comcast pins hopes on a mobile future. Cable companies Comcast and Time Warner have been negotiating with Sprint, Clearwire, Intel, and Google to launch a joint effort to build a national WiMax network. I've written here in the past about WiMax and the relationships Clearwire, Sprint and Google were building and it makes sense to see the cable companies looking at providing broadband wireless services.

We're seeing some interesting customer movement in the industry - another Fortune piece from May 1 describes Comcast's first quarter earnings, here's a couple of interesting quotes from that piece:

• Comcast lost 57,000 basic video subscribers, but added 494,000 digital cable subscribers.
• The company said 65% of video subscribers now have digital service, up from 55% a year ago, and 43% have so-called advanced services like digital video recorders or high-definition TV, up from 38% last year.
• The company also added 492,000 high-speed Internet users and 639,000 Comcast Digital Voice phone customers.

What's happening? We've got the telcos like Verizon and AT&T chasing new video customers and the cable companies like Comcast and Time Warner chasing new voice customers. Both AT&T and Verizon sell 3G wireless services - it makes sense for the cable companies to add a wireless product and it makes a lot os sense to partner with existing wireless providers like Clearwire and Sprint. JPMorgan analyst Jon Chaplin is quoted in the earlierFortune piece: By creating a joint WiMax venture, "it would cost them a fraction of what it would cost them to build out" their own network or to buy Sprint outright.

Keep watching - the deal could happen as early as this week.

Tiered Internet Services Coming?

On January 18, Business Week published an interesting article about a trial Time Warner’s cable division will be running in Texas later this year. Here’s a quote from the article:

Time Warner Cable plans to test a multi-tiered price system for high-speed broadband service later this year. New customers in the trial area of Beaumont, Texas, will be charged different rates based on the amount of data consumed in a month, much like a cell-phone plan charges based on minutes used.

Right now Time Warner is saying they will offer plans priced for up to 5, 10, 20, and 40 gigabytes per month, with middle-tiered plans running roughly the same amount average users currently pay (around $30 per month) for high-speed connections. The company also says they will allow customers to go over their limit but they will be billed for the extra.

This actually makes some sense from both a business and a consumer perspective – the ISP’s have always said 5% of users consume as much as 50% of network capacity downloading vast numbers of large files, such as movies, videos, and songs. I think of my parents who use little bandwidth to check email and occasionally surf the web and compare them to our house where my teenagers are often watching and uploading videos on YouTube, uploading to Flickr, downloading Mike Q and my podcasts , etc. I’m certainly not putting my kids in that top 5% but you get the idea – why are my parents paying just as much as us when we’re using a lot more bandwidth?

Companies looking to sell audio and video products on the web (NetFlix, Apple, Amazon, etc) are the ones who could ultimately get hurt. If I’ve used up my 20 gigabytes this month I’m not going to download that movie I wanted to watch on Friday night……… Here’s another piece from the article:

Another unintended consequence of tiered pricing is that it could discourage some companies from launching new services that require large bandwidth, consumer advocates say. The plans could also penalize early adopters whose heavy use of new services helps developers come up with refinements that use up less bandwidth……

According to the Business Week article, Comcast is considering a similar plan. Right now, Verizon does not appear to be.

I’ve written in the past about the Amazon Kindle eBook reader. The Kindle uses a cellular network connection to deliver books purchased by users. The cost of cellular service is bundled into the price of the book by Amazon - users do not need a cellular contract to make purchases on their Kindle. Perhaps the ISP’s should consider similar arrangements with companies selling audio and video products on the web.

Interoperability - The Next Killer App?

Last month I was invited to attend a Cable & Telecommunications Association for Marketing (CTAM) New England Roundtable Event at a Comcast facility in Enfield, Connecticut. Interactive roundtable sessions were led by New England Multiple System Operator (MSO) Leaders on the next wave of changes for the Cable Telecommunications Industry. These interactive sessions were held on new business markets, new technologies. cross-platform content strategies and new products. One of the sessions I attended was on Pivot, a collaborative wireless product that connects Sprint with Comcast, Time Warner, Cox and Advanced/Newhouse Communications.

Pivot integrates a customers mobile phone, home phone, broadband and digital cable services into one interoperable technology and billing package commonly being referred to now as a "quadruple play". At the Cellular Telecommunications & Internet Association (CTIA) I.T. conference last March, Comcast CEO Brian Roberts discussed "killer apps" for products like Pivot. These apps include interoperability, wireless email and place shifted television. Here's a quote from Roberts at the conference:

"Over time [the killer app is] going to be interoperability. Can I take my email and get it on another device? I've been watching my on-demand shows, I've stopped watching at home, I want to finish the last five minutes. Place won't matter." Roberts continued: "There'll be a relationship with the company that will manage my data, my television, my phone, my address books, and my voice mails. The seamless nature of that is what mobility brings.

Robert's comments are right on the mark in my opinion.

Pivot also allows unlimited calling between your cable home service and mobile phones and you can do things like program your DVR using your cell phone. Here's a 45 second commercial you may have seen if you live in Pivot territory:

I was impressed with the first generation Pivot phones and applications I saw at the CTAM meeting last month. I walked away asking myself - Is it cable? Is it wireless? My answer - it's both - it's interoperable!

You can get more info at mypivot.com