FiOS 500 Leaves Cable in Dust

Who says broadband speeds don't count?

Certainly not Verizon Communications, which has boosted the maximum speeds for its FiOS Internet service to 500 Mbit/s downstream and 100 Mbit/s upstream. Verizon confirmed press reports Monday that it has begun rolling out its latest "FiOS Quantum Internet" product in "parts of every FiOS market," with plans to deploy the service throughout the entire FiOS footprint by sometime next year. The telco is pitching the new high-speed tier to consumers and businesses for about US$300 a month and up, depending on how it's bundled with other video and voice services.

With the move, Verizon is now offering the fastest broadband speeds among North American cable operators and telcos, easily leapfrogging Comcast Corp. Only Google Fiber -- which has rolled out symmetrical 1Gbit/s service in the Kansas City area and plans to extend service Austin, Texas Provo, Utah and other markets shortly -- now claims higher transmission speeds in the U.S. and Canada.

For cable operators, the question now is how to respond. When Verizon boosted FiOS Internet's top speeds to 300 Mbit/s downstream and 65 Mbit/s upstream in June 2012, Comcast quickly countered with its own fiber-driven 305Mbit/s by 65Mbit/s service in its northeastern U.S. markets. But it's not clear if Comcast or any other U.S. cable operator can or will do so again so fast this time around.

Just last week, Cablevision Systems Corp. boosted most speeds for its broadband customers at no extra charge and streamlined its tiers. But Cablevision, which tops out at 101 Mbit/s downstream for its Optimum Online Ultra 101 tier, increased only the upstream speed for that tier, raising it from 15 Mbit/s to 35 Mbit/s.

North American cable operators will gain the capability to offer downstream speeds as high as 1.2 Gbit/s, thanks to a new DOCSIS 3.0 chipset that Broadcom Corp. is now developing. That cable modem and gateway chipset, which was announced early last month, will enable MSOs to bond up to 32 downstream and eight upstream channels. But it's not slated to go into volume production until the end of the year, meaning that devices embedded with it won't be available for a while yet.

Beyond that, the cable industry is eagerly looking forward to the development of the next-gen DOCSIS 3.1 specs, which CableLabs engineers are now racing to craft in record time. These new D3.1 specs promise to deliver speeds as high as 10 Gbit/s downstream and 2 Gbit/s upstream for operators. But, even under CableLabs' aggressive development schedule, new devices meeting the specs won't be available till next year and the initial product deployments probably won't take place till 2015.

In the meantime, Verizon is moving ahead with FiOS Internet. With the FiOS footprint now covering about 18 million homes, the telco is actively marketing the service to 15 million homes. Of those, it has signed up nearly 5.8 million subscribers, giving it a 38.6 percent penetration rate, after netting 161,000 new customers in the second quarter.

Verizon does not break down how many of its broadband subscribers use each FiOS Internet tier. But the company does say 35 percent of its customer base now subscribes to at least 50Mbit/s downstream speeds.

— Alan Breznick, Cable/Video Practice Leader, Light Reading