Who Needs a Gig? Verizon's Got 750 Mbit/s

Bucking the gigabit trend, Verizon has announced a new Internet service tier with speeds reaching 750 megabits per second. The upgraded service will start rolling out on January 14 in New York City, northern New Jersey and Richmond, with Verizon planning to extend to portions of Boston and Norfolk before the end of the first quarter. The service will be available initially at nearly 7 million locations -- both homes and businesses -- and will eventually be offered as an option to all Fios customers.

Although the Verizon Communications Inc. (NYSE: VZ) news is merely an incremental speed boost above the ISP's current 500Mbit/s offering, a few things stand out about the company's announcement.

First, Verizon isn't jumping to gigabit speeds with its new Fios Instant Internet option despite the fact that its Fios footprint is entirely based on fiber-to-the-home infrastructure, which should make gigabit broadband eminently feasible. And not only is Verizon fully deployed with FTTH for Fios homes and businesses, but the company is at the leading edge of new technologies including 5G and NG-PON2 that will ultimately deliver multi-gigabit speeds. (See Verizon Proves NG-PON2 Interoperability.)

So why isn't Verizon upping the ante?

According to spokesperson Ray McConville, "We'd rather under promise and over deliver." He notes that many broadband providers offer speeds "up to" a gigabit, but that their services aren't guaranteed at that level. McConville adds that Fios Instant Internet delivers at least 750 Mbit/s "and frequently performs well into the 900Mbit/s range."

That sounds good, but it doesn't have quite the same ring as gigabit service.

The rollout of higher-speed broadband access networks is spreading. For more insight, check out our dedicated gigabit/broadband content channel here on Light Reading.

Second, Verizon is continuing to push the message that symmetrical broadband is better than Internet service with high downstream speeds and mediocre upstream capacity. While most customers need significantly higher downstream capacity than upstream, Verizon's symmetrical offering is still a differentiator. As cable companies introduce their initial gigabit offerings with DOCSIS 3.1, those services are still limited to upstream speeds of well under 100 Mbit/s. Once the cable industry starts deploying Full Duplex DOCSIS, the upstream limit will increase, but as a Heavy Reading report found recently, FDX isn't likely to hit the market until 2019, and it will require cablecos to make significant upgrades to their last-mile infrastructure. (See How Cable Plans Symmetrical Gigabit via FDX.)

Third and finally, Verizon is making a statement with the pricing for its new Internet speed tier. At $150 per month for standalone service, the price tag is higher than many ISPs charge for full gigabit delivery, and may indicate a new standard in pricing now that pressure from Google Fiber has eased and a new regulatory environment in the US makes it unlikely the government will actively try to rein in monthly Internet costs. (See Trump Win Will Reshape FCC .)

Perhaps even more importantly, Verizon is bundling video and phone service with the new 750Mbit/s tier for a total fee of only $170 per month. The price differential illustrates how Verizon is devaluing TV and phone service, while also making it less attractive for customers to buy those service elsewhere. If subscribers are already spending $150 per month for broadband from Verizon, there's less incentive to consider third-party over-the-top packages when an additional $20 (also paid to Verizon) gives them the complete triple-play bundle.

Is the pricing play the start of a new, more dramatic trend toward costly broadband and cheaper video and voice services? For providers like Verizon where broadband access is their strongest asset, that would certainly make sense.

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

kq4ym 1/24/2017 | 6:28:37 PM
Re: "Underpromise and overdeliver" That's a very good explanation of the reality of the speeds and symetric claims. It does seems that an  under promise and over deliver claim may seem reaonable but as explained even that is probably just a little bit of hype.
KBode 1/17/2017 | 9:14:59 AM
Re: "Underpromise and overdeliver" "In reality, residential customers are extremely unlikely to  to burst at anywhere near 750 Mbps, never mind 1 Gbps, now or in the immediate future. It's a perception game, not anything substantive."

I'd tend to agree. Several ISPs have noted it does get users calling in to see if it's time for a speed upgrade though (the majority have no damn idea what speed they actually have). So it certainly does have some marketing benefits. 

Though one study also noted that areas with gigabit broadband see lower prices overall.
steve q 1/12/2017 | 10:32:12 PM
Re: "Underpromise and overdeliver" I see Verizon only way to be able to provide the faster speed is like they are doing in Boston Ma, using fiber jumper and not directly into the ont that way they can provide the fastest speed to the customer and more to the business world thou a hotspot.  The only issue is Verizon is planning a bigger push into it 5g plan and that will end up stopping any plan to make it service faster than Comcast or google, everyone is moving to more of a data pipe line we need to find those people that understand what the customer are looking for and how to provide them the best in service with the pipeline of the fiber .
brooks7 1/12/2017 | 5:46:22 PM
Re: "Underpromise and overdeliver" "- The statistical probability of a customer being able to actually receive at the headline speed depends upon how much overbooking is designed into the network. "

To add to what Duh! has said here, the number of customers that are sharing the bandwidth and what both their provisioned speed, average usage and then the actual usage patterns come into play here.

Not everyone will be provisioned with the maximum rate.  When the service is designed it has to assume that they are for a worst case.  So performance is generally better than worst case.  On top of that not everybody is using their maximum most of the time nor even a large minority of the time.  You need really big downloads (and not streaming) or uploads to occupy your bandwidth for long periods of time.


Duh! 1/12/2017 | 1:13:46 PM
"Underpromise and overdeliver" Translated to engineer-speak: conservative traffic engineering.

Summary of a long story:

- FTTH (and, for that matter, DOCSIS) are shared media.

- Headline speed in FTTP (and DOCSIS) is really the settings of the traffic shaping parameters in the OLT (CMTS. Google Fiber's flagship service turns that 'knob' to 1000, Verizon's to 750.  No other differences.

- Symmetrical speed really means that the upstream and downstream 'knobs' are turned to the same settings. It does not mean symmetrical bandwidth.

- Headline speeds are "up to". What a customer can actually receive at any instant of time is the lesser of the headline speed and a nominally fair share of about  2 Gigabits per second downstream, 1 Gbps upstream.

- Networks always "overbook" - the sum of the customers' headline rates in each directions is greater than the bandwidth that they share.

- The statistical probability of a customer being able to actually receive at the headline speed depends upon how much overbooking is designed into the network. 

- Network performance, including ratio of headline rate to actual peak rate, is measured by Ookla and ultimately reported to the FCC.

- FiOS has consistently rated at or better than 100% on those metrics. One might strongly speculate that they want to keep it that way.

In reality, residential customers are extremely unlikely to  to burst at anywhere near 750 Mbps, never mind 1 Gbps, now or in the immediate future. It's a perception game, not anything substantive.

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