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The increasing pace of gigabit network rollouts by providers of all stripes is putting more pressure on competitors to respond.

The Power of the Gig

Jason Meyers
7/30/2014
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When I answered an incoming customer service call from Comcast yesterday, all I really hoped was that my experience would be better than this guy's. (See What Can We Learn From Comcast's Customer Service Nightmare?)

Turns out it was. For one, my call was from an automated and far less argumentative voice. Also, I wasn't planning to cancel my service (not yet, anyway). And finally, the automaton told me that Comcast Corp. (Nasdaq: CMCSA, CMCSK) was doubling my internet speed for no additional charge, effective immediately.

I haven't binge-watched House of Cards since I got that call, so I have yet to know if Comcast's action will improve my often frustrating Netflix Inc. (Nasdaq: NFLX) experience. But I know this: I feel a little better about Comcast.

Is it a sign of the times, this unsolicited gesture to satisfy customers and stave off churn? It would seem so -- and it's likely a development driven by ever-increasing competitive pressure, especially from the myriad providers now beginning to offer gigabit services.


Get the latest updates on what will be the next Gigabit Cities by visiting Light Reading's Broadband/FTTx content channel.


These providers run the gamut: There's AT&T Inc. (NYSE: T), which has recently added San Antonio, Nashville, Dallas/Fort Worth, and three North Carolina communities (Charlotte, Winston-Salem, and Raleigh-Durham) to the list of cities that will join Austin in getting its GigaPower service. There's Google Fiber Inc. , which is signing up customers in Kansas City and Provo, Utah, and has Austin and nine more cities on deck, many of which overlap AT&T's GigaPower map.

But then there are the smaller providers -- according to the Fiber-to-the-Home (FTTH) Council , 55 in all in the US, including telcos, municipalities, utilities, and even real estate interests. These are the entities bringing gigabit services to smaller cities and towns, stepping up the competitive pressure on the Comcasts, AT&Ts and Google Fibers of the world, whether those larger players are willing to admit it or not -- and adding to the regulatory ruckus while they're at it. (See If Not Muni Networks, Then What?, Muni Utilities Take Gigabit Fight to FCC, and The Municipal Menace?).

Competitive pressure can do wonders for service innovation. (There's even a startup in my tiny hamlet that's plotting a gigabit network build, which might account for the Comcast call.) Competitive pressure also ups the level of debate, raising important issues like states' rights, the role of the FCC and federal government, proper municipal use of taxpayer funds, even the question of how necessary gigabit speeds are -- especially for residential customers -- at this point in time. And in regions that might never get the attention of Google Fiber or GigaPower from AT&T, gigabit initiatives are aiding economic development efforts and potentially contributing to community transformation. (See Comporium Aims Gig at Businesses, Residents.)

All of it is certain to continue apace, keeping things very interesting -- and, if nothing else, improving the binge-watching experience for us all.

— Jason Meyers, Senior Editor, Utility Communications/IoT, Light Reading

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atiller
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atiller,
User Rank: Lightning
8/1/2014 | 7:47:04 AM
not just about csp churn..

Yes competition is sometimes the mother of innovation, and also of improved customer care.  But maybe it shouldn't just be about reducing churn - maybe there's some rev-gen that can come that way as well.  

Maybe next-time your operator detects you are trying to binge watch House of Cards, it could offer you a service speed upgrade for the next 3 (4, 5, 24?) hours to improve your viewing.  You might happily pay a couple of dollars for that uplift.  Or Netflix might want to pay some or all of that for you - in order to stop you switching to Amazon LoveFilm (and that would be improving customer service to stop churn by an OTT player).

But then we have strayed from improving customer service into the whole net-neutrality debate and kicked off another thread entirely.  Some of these innovations can get pretty interconnected.

pcharles09
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pcharles09,
User Rank: Light Beer
7/31/2014 | 9:42:00 AM
Re: The Need for Speed
@FakeMitchWagner,

Unfortunately in my location in NYC, we're locked into only 1 high speed provider. Somehow, our building management only allows TWC.
SachinEE
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SachinEE,
User Rank: Light Sabre
7/31/2014 | 6:20:00 AM
Competitive pressure
Clearly the increase in competitive pressure is the only reason why Comcast is doubling your internet speed. There are many rival carriers who are also offering some sort of discounts so that's the only way to stay afloat and avoid losing their clientele to other carriers. I wouldn't mind if they threw that offer my way but as it is, they have no choice. It's actually a step into the right direction because now they can keep up with the other carriers.
Michelle
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Michelle,
User Rank: Moderator
7/30/2014 | 10:38:47 PM
Re: The Need for Speed
I would take the additional speed for almost the same price I'm paying now! I don't need a gig and would be very happy if we were getting 70 mbit/s. We're bandwidth poor. Enjoy your doubled bandwidth!
jabailo
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jabailo,
User Rank: Light Sabre
7/30/2014 | 9:44:43 PM
Re: The Need for Speed
I believe each Netflix HD movie stream only requires about 2Mpbs for playback.

The problem with streaming has often been with the Netflix servers themselves or the ISP, though they've been addressing both those issues with more hardware and by paying for bandwidth.

With those being optimal, you should easily be able to fit 5 concurrent movie streams, however, you probably would need a very good Wifi hub to manage all the traffic.




 
Mitch Wagner
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Mitch Wagner,
User Rank: Lightning
7/30/2014 | 6:34:37 PM
Re: The Need for Speed
I almost certainly don't need a gig. But I can always use a little more than I have now. And I expect that will be true if I get a little more -- I'll want a little more than that. Pretty soon I'd have a gig and still be hankering for more. 


I wonder whether carriers really face competition through much of the US. 55 communities sounds like a lot, but the US is an awfully big place, and it's my impression that the overwhelming majority of the population has a choice of at most two high-speed providers. 
brooks7
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brooks7,
User Rank: Light Sabre
7/30/2014 | 5:26:37 PM
Re: The Need for Speed
Jason,

Not sure I would take it as I would then have to up my home router.  I don't use any of the router capabilities of my Cable Modem as I want to control that exclusively.

Other than that - sure.....

 

seven
jasonmeyers
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jasonmeyers,
User Rank: Blogger
7/30/2014 | 4:46:19 PM
The Need for Speed
Netflix streaming really is the most bandwidth-intensive application going in my household, with various devices like Kindles and iPhones in the hands of small people (streaming purely educational content, I'm told) running a close second. A quick Ookla speedtest tells me I'm currently getting about 70 Mbit/s download speeds if I sit near the Comcast box, and just a little shy of that if I sit one room away. 

The point of all this is to say that I probably don't really need a gig -- but if it were available to me for a price in the ballpark of what I'm paying now, I would take it. Would you?
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