Slow Roll Builds for DOCSIS 3.1

Like the proverbial snowball at the top of the hill, DOCSIS 3.1 is still small in deployment terms, but it's picking up momentum in the second half of 2016.

Comcast Corp. (Nasdaq: CMCSA, CMCSK) has led the D3.1 charge and today is launching gigabit service over DOCSIS 3.1 in Chicago. The Chicago market launch follows similar rollouts in both Atlanta and Nashville, and Comcast has said it will deploy the technology next in Detroit and Miami.

Generally Comcast has been cautious with gigabit service. While the company introduced a multi-gigabit fiber-to-the-home service last year, the $300-a-month cost put it out of reach for most consumers. The new D3.1 product is available for a competitive promotional price of $70 per month in Atlanta and Nashville, but that discounted fee requires customers to sign a three-year contract. Otherwise, the service is $140 per month. According to the Chicago Tribune, the $140 price tag also applies to Chicago residents, although Comcast plans to test additional promotional plans. There is also a data cap of 1 terabyte for customers in Chicago. (See Comcast trots out Gigabit Pro… at a price and In D3.1 First, Comcast Goes Gig in Atlanta.)

Comcast's traditional strategy with broadband upgrades has been to stay ahead of the market in capacity terms, but not to get aggressive with pricing or with promotion of its highest speed tiers. The operator began its upgrade to DOCSIS 3.0 in 2009, well ahead of many other cable companies. And it was also a leader around the same time in converting its video delivery systems to all-digital, reclaiming analog TV bandwidth for expanded Internet services.

However, the moves by Comcast are less about selling super-high-speed Internet services in the short term (although that does help with bragging rights) than they are about giving Comcast room to breathe as more and more services shift to IP. The company has also been pushing fiber deeper into its network to gain capacity and has expressed its support for the rapid development of Full Duplex DOCSIS, which promises to extend cable broadband capabilities in the upstream for symmetrical speeds up to 10 gigabits per second. (See Full Duplex Is a Go; Cable Aims for 10 Gig.)

For more fixed broadband market coverage and insights, check out our dedicated Gigabit/Broadband content channel here on Light Reading.

Despite Comcast being the fastest mover on DOCSIS 3.1, it's not the only operator pushing the technology into the field. Recently, Midcontinent Communications (Midco) also announced that it's on track to roll out DOCSIS 3.1 in four to five of its largest markets by the end of the year, and it expects to complete D3.1 upgrades throughout its footprint by the end of 2017. That news came just shortly before FierceCable also reported that Midco is teaming up with CableLabs subsidiary Kyrio to offer WiFi roaming across both Midco's own public WiFi network and public WiFi networks run by other cablecos, including Comcast.

The two updates from Midco aren't directly related, but they do show that the company is placing a significant emphasis on broadband services. That's a common theme among mid-tier operators as the margins for video services continue to decline. (See TV Retrans Wars Impact Broadband Too.)

WideOpenWest Holdings LLC (WOW) and Mediacom Communications Corp. also announced this month that they will start delivering D3.1-powered gigabit services before the end of the year, and more of the largest US cable operators have previously declared their DOCSIS 3.1 plans. (See WOW Launches Gig Service in 5 Markets and Mediacom Revs Up for Gig Upgrade .)

Among the largest operators, Cox Communications Inc. has said it will run a DOCSIS 3.1 trial this year before moving to commercial deployments likely in 2017. Altice has started testing D3.1 in France, but is sticking with DOCSIS 3.0 for now in delivering gigabit services in the US through its Suddenlink Communications subsidiary. (See Cox Reveals Next Steps for D3.1, CCAP and Gigabites: Altice Goes Gigabit in the USA.)

Only Charter Communications Inc. has been vague about both its DOCSIS 3.1 and gigabit plans. At last check, the cable operator was planning to begin the transition to D3.1 sometime in 2017. (See Charter Plots Cloud Video, DOCSIS 3.1 Rollouts.)

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

KBode 8/18/2016 | 1:23:30 PM
Re: Chicago launch Yes, using the lack of competition to charge more money makes sense for them.

Of course it's worth noting that Comcast isn't even giving that option in Chicago where it launched gig service this week, charging consumers TWICE that amount because Google Fiber won't be there any time soon.
Duh! 8/18/2016 | 12:36:56 PM
Re: Chicago launch Pricing may be "silly" from a consumer perspective.  From Comcast's perspective, locking customers a 3-year contract is a B-school playbook response to new competition.
Mitch Wagner 8/17/2016 | 3:40:19 PM
Re: Chicago launch cnwedit - Keeping the pricing high could be a way of throttling demand, keeping the number of customers from overwhelming capacity without keeping anyone waiting. 

Agreed that demand for gigabit isn't there yet. Maybe when VR goes mainstream in 5-10 years -- though I'm a VR skeptic
Mitch Wagner 8/17/2016 | 3:34:32 PM
Ahead of the market "Comcast's traditional strategy with broadband upgrades has been to stay ahead of the market in capacity terms, but not to get aggressive with pricing or with promotion of its highest speed tiers... "

That makes sense. With something like gigabit Internet, a provider wants to stay ahead of demand -- but not so far ahead that it fails to recoup its investment in a timely fashion. 

KBode 8/17/2016 | 3:26:30 PM
Re: Chicago launch Pricing is kind of silly. $70 if you agree to a three year contract so you can't sign up for Google Fiber (or another competitor) if it comes to town, $140 a month and you face usage caps if you don't sign said three year contract. Interesting strategy to be sure. 
cnwedit 8/17/2016 | 2:52:10 PM
Chicago launch I haven't seen the pricing here in Chicago yet, but I can tell you that $300 a month doesn't compete with AT&T's fiber-based Uverse and a three-year contract would be a no-go for lots of folks. 

On the other hand, Comcast's X1 product is far superior to AT&T's U-verse IPTV platform - says someone who has used both - so at the end of the day it is going to come down to what the consumer values most, faster Internet or better pay TV. 

The trends seem to be leaning toward the former. But I'm still not convinced that residential customers really need a full gigabit. 
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