Broadband Is a Commodity

2:15 PM -- In the race to deliver promised broadband speeds, Verizon Communications Inc. (NYSE: VZ)'s FiOS service is winning, but three of the largest cable companies -- Comcast Corp. (Nasdaq: CMCSA, CMCSK), Cox Communications Inc. and Charter Communications Inc. -- are close behind, according to a report issued by the Federal Communications Commission (FCC) Tuesday. Cablevision Systems Corp. (NYSE: CVC) and AT&T Inc. (NYSE: T) trail the pack, delivering on promised speeds only 80-plus percent of the time, the report said.

You can read the report for yourself, right here, but one of the things that struck me about it is that the distinctions among the different services weren't all that great, even though fiber outperformed the rest.

The good news for everyone is that the entire industry is much closer to providing consumers with the broadband speeds for which they are paying. It was only two years ago, the FCC says, that only 50 percent of broadband ISPs were delivering the advertised speeds.

Taken in conjunction with other findings, however, the differences among the service providers may be less important than the prices they charge.

For example, the report finds that streaming video worked fine at 1 Mbit/s for standard video and at 2 Mbit/s or more for higher-quality video, and VoIP also worked well at all level of services tested. VoIP did suffer when multiple users within the household were sharing bandwidth.

Basic Web browsing was even less affected by higher-speed services -- in fact, beyond 10 Mbit/s, there was little additional improvement in Web browsing, the report found. Those ballyhooed burst speeds, marketed as "power boosts," only helped improve short-term quality and therefore only help Web page transfers or online game action. They weren't useful for large file transfers or video streaming.

Peak traffic affected cable modem speeds the most, which makes sense because of the shared bandwidth. But the difference between the peak speed decreases for cable (7.3 percent) and DSL (5.5 percent) weren't all that great. FTTH suffered from almost no peak degradation (0.4 percent).

Upload speeds were actually closer to the advertised rates than download speeds. DSL uploads were 85 percent of advertised rates, cable-based services were 108 percent and FTTH was 112 percent.

— Carol Wilson, Chief Editor, Events, Light Reading

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Pete Baldwin 12/5/2012 | 4:57:29 PM
re: Broadband Is a Commodity

Man... sucks to be on Cablevision, doesn't it.

'Course, I don't know offhand what their advertised speed is. Maybe 55% of it is still blazing fast.

I guess the glass-half-empty view here would be that practically nobody truly hits their advertised speed, especially in peak hours.  But it's good that they're getting some consistency between peak and non-peak.

cnwedit 12/5/2012 | 4:57:28 PM
re: Broadband Is a Commodity

I think the penalty - where competition exists - is that you take your business elsewhere. One of the goals of the FCC report was to give consumers information so they could make their own decisions.

It will be interesting to see if Verizon gets a sales uptick, particularly on Long Island, where it competes with Cablevision.

DCITDave 12/5/2012 | 4:57:28 PM
re: Broadband Is a Commodity

Is there a penalty for advertising one thing and delivering another? Or are they covered because they say "up to speeds of... " and that lowers the expecation that you'll ever reach such a speed?

cnwedit 12/5/2012 | 4:57:28 PM
re: Broadband Is a Commodity

Actually, Verizon does deliver what is advertised - actually they exceed it -- with FiOS. And - surprise! - they're pretty happy with this report. 

I think a consumer could tell the difference between FiOS and Cablevision, based on getting the speeds advertised. I just wonder if they could tell the difference between FiOS and Comcast Xfinity.  I'm guessing they can't, which means they'll buy the one that is cheaper.

Now as more people watch more video, including during peak hours, that could change.

cnwedit 12/5/2012 | 4:57:27 PM
re: Broadband Is a Commodity

Do you think most consumers know when they are getting 8 Mb/s or 10 Mb/s, instead of 15 Mb/s? Or are the people who bought the higher-speed service, especially in the early days of FiOS, more likely to be early adopter-type geeks or those with business or leisure (read: gaming) applications that require that kind of speed?

According to the FCC report, Web browsing doesn't substantially improve above 10 Mb/s.

paolo.franzoi 12/5/2012 | 4:57:27 PM
re: Broadband Is a Commodity


Well, there is at least one potential reason for the reason that FiOS did so well.  Verizon pays a lot of attention to this performance.  When the FiOS rollouts were happening we had a LOT of trouble getting Layer 3 throughputs to meet the specifications that Verizon was rolling out the service for.  There were lots of reasons for this and we spent a lot of time with them making sure that the layer 2 speeds that they were measuring with us became evident at layer 3 for consumers.  People would get really upset when they would by a 15 Mb/s service and only be able to measure 10 Mb/s or 8 Mb/s.  I would be curious if the Cable guys had the same experience with their high speed offerings.




Jeff Baumgartner 12/5/2012 | 4:57:26 PM
re: Broadband Is a Commodity

Unless I'm downloading something really big like a movie or TV show from a servcie like iTunes, I doubt I'd notice a huge difference between them without having access to a  relatively accurate broadband speedometer that actually showed me what the bit rate was.  And, with technologies like adaptive streaming growing more popular, it's getting harder and harder for the eye to notice how speeds are fluctuating until it starts getting extremely bad and the quality of the video simply falls  off the table. JB

Jeff Baumgartner 12/5/2012 | 4:57:25 PM
re: Broadband Is a Commodity

Just as Verizon reacted favorably to the results, it's probably no big surprise that Cablevision had a much less possitive reaction to the report.  Here's their statement,  claiming that the findings don't match up with what was found in other ISP-related surveys, highlighting this recent one from JD Power where Cablevision came out on top:

"Cablevision delivers some of the fastest Internet connections in the country, on our basic tier, two higher levels of service and our WiFi network and this report simply does not reflect the experience of our nearly 3 million broadband customers. Our high-speed Internet product leads the nation in consumer adoption and has consistently won top ratings in much broader and more extensive consumer surveys conducted by J.D. Power & Associates, PC Magazine and others."

So many surveys have been done in recent years with different results. How much weight do you put into today's? JB

paolo.franzoi 12/5/2012 | 4:57:24 PM
re: Broadband Is a Commodity


The thing was that the installation process had them to a speed test with the consumer before departing.  They really did not want to go back again.  Most of the problems were actually PC issues not network issues (not to say there were 0 network issues).

I do not think people noticed once the service was up and running.  That is why I am curious of the cable installation experience.




cnwedit 12/5/2012 | 4:57:24 PM
re: Broadband Is a Commodity

It's a good question and one I can't answer, except from personal experience. My last two installations have been by cable technicians, from two different companies. One of them came and went in a matter of minutes, throwing me a piece of paper with customer service phone numbers on it as he raced out the door. The other was here all afternoon, upgrading things and explaining everything in great detail.

Neither did a speed test.

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