Although Verizon's speed upgrades take the downstream into account, the latest tiers emphasize a speedier upstream and target cable's historic challenges in this area.
Here's how the new tiers stack up. Note that speeds are higher (and approaching symmetry) in Verizon's New York-area FioS footprint, where it crosses swords with Cablevision Systems Corp. (NYSE: CVC) and Time Warner Cable Inc. (NYSE: TWC).
Table 1: Old vs. New
|Tier||Old Upstream||New Upstream||Old Downstream||New Downstream|
|Entry-level||2 Mbit/s||5 Mbit/s||10 Mbit/s||15 Mbit/s|
|"Flagship" mid-level||5 Mbit/s||15 Mbit/s||20 Mbit/s||25 Mbit/s|
|Entry-Level (NY area)||2 Mbit/s||15 Mbit/s||10 Mbit/s||25 Mbit/s|
|"Flagship" mid-level (NY area)||5 Mbit/s||20 Mbit/s||20 Mbit/s||35 Mbit/s|
|Source: Verizon Communications|
"Cable companies continue to focus on downstream connections," Mike Ritter, the CFO of Verizon's telecom business, said during a Monday morning briefing with press and analysts, pointing to an In-Stat study indicating that the average cable upstream connection is 2.68 Mbit/s.
"That's not nearly fast enough for today's two-way Internet experience," he claimed. Broadband "is not fast unless it's two-way fast."
The cable industry is fighting off FiOS and other fiber-to-the-premises (FTTP) competition with Docsis 3.0 , a CableLabs platform that uses channel bonding techniques to produce shared speeds in excess of 100 Mbit/s. Most of those deployments, however, are focused on bonded downstream speeds as MSOs and their vendors vet how to do the same in the upstream.
Only one cable modem termination system (CMTS) vendor, Casa Systems Inc. , has gained CableLabs certification for a feature set that includes upstream channel bonding. However, Japan Cablenet Ltd. recently began deploying upstream channel bonding using CMTS gear from Arris Group Inc. (Nasdaq: ARRS). (See CableLabs Cheers Casa Chassis, Cisco, Arris & Casa Make the CableLabs Grade, A Decade of Docsis , and Japan Cablenet Swims Upstream .)
Comcast Corp. (Nasdaq: CMCSA, CMCSK) CTO Tony Werner indicated in a recent video interview that the MSO was on course to begin upstream channel bonding lab tests this year.
In the meantime, Cablevision is going after Verizon with a wideband service that offers 101 Mbit/s downstream and 15 Mbit/s upstream for $99.95 per month. Time Warner Cable has already identified NYC as a candidate for its first Docsis 3.0 launch, indicating that it will likely start off with a wideband tier of 50 Mbit/s down by 5 Mbit/s up for $99 per month. (See Cablevision Debuts 101-Mbit/s Wideband Service.)
Cablevision will likely be able to tout downstream bragging rights for a while yet, since Verizon has no near-term plans to offer a 100 Mbit/s FiOS Internet tier.
"We're really not seeing a demand for 100-Mbit/s service now," Ritter said, adding that faster uploads is where Verizon is focused. However, the underlying FiOS technology "will allow us to go much faster than where we are today," he added, taking a moment to point out the $300-plus charge Cablevision requires for turning on and provisioning its new Optimum Online Ultra tier. (See Activating Wideband .)
In addition to the straight-up speed increases, Verizon is also trying to attract cable customers by giving away either a Compaq Mini netbook or a Flip Ultra camcorder to some new voice and broadband customers. Those customers need to agree to a one-year contract for the telco's double- or triple-play bundles that include specific speed tiers. The promo also applies to some current subscribers who add those Internet speed tiers. (See VZ Gives Netbooks, Flip Cams to New FiOS Subs and Cisco's Latest Buy: Flippin' Sweet.)
The telco is also launching two "hyper-local" networks -- FiOS1 Long Island and FiOS1 New Jersey, complementing a similar network Verizon launched in Washington, D.C., about two years ago. Those networks (here's an example), which won't be offered for carriage on cable systems, will focus on local news, sports, traffic, and weather info. (See Verizon Extends FiOS Net.)
Verizon will be using all of these promos and speedier service tiers to beef up its FiOS subscriber figures and steal some away from cable MSOs and satellite TV service operators. The telco ended the first quarter with 2.2 million FiOS TV subscribers, and 2.8 million FiOS Internet customers. The company claims an average FiOS TV penetration of 24 percent, and 28 percent for FiOS Internet.
— Jeff Baumgartner, Site Editor, Cable Digital News