Monday, April 13, 2015

What Will ISPS Do When They Cannot Upgrade to a Gigabit?

Though it isn’t yet clear how Internet service providers are going to compete against competitors able to offer much faster speeds, we are going to get more evidence as Time Warner Cable in the Charlotte area are upgraded, in large part to counter Google Fiber and AT&T gigabit access services.

“TWC Maxx” will feature speed boosts as much as six times over current levels, for no increase in price.

Customers who subscribe to “standard” service (up to 15 Mbps) be boosted to speeds as high as 50 Mbps.

“Extreme” customers buying high speed access at speeds “up to 30 Mbps” will be boosted to , “up to 200 Mbps.”

“Ultimate” customers, with access to speeds “up to 50 Mbps” will get speeds “up to 300 Mbps.”

Time Warner Cable also is upgrading its digital video recorder features, allowing customers to simultaneously record up to six different programs, and the ability to save 150 hours of high-definition (HD) programming on its 1TB (terabyte) hard drive, which is twice the storage of the largest prior model.

Customers will also have access to an all-digital lineup and an expanded On Demand library that has reached 19,000 titles, growing to more than 30,000 by the end of the year.

So you can see some elements of a possible strategy, when an ISP cannot afford to upgrade all the way to match the headline offers from Google Fiber and another ISP. Speed will be upgraded, often at no extra charge, to close the gap in practical terms, even if it remains impossible to match headline speeds.

Then other key elements of the bundle experience also are upgraded

Something similar will have to be considered as the number of ISPs offering much-faster speeds continues to grow. A number of contestants, such as fixed wireless providers, satellite providers and some small telcos, simply will not be able to match gigabit speeds.

In many cases, even large telcos will not desire to do so, and the financial return is deemed too small, or even negative.

Increasingly, we are going to find out just what it takes for many ISPs to compete against other ISPs offering gigabit speeds, when that offer cannot be matched.

All be watching to see how successful such efforts might be. After all, the actual end user benefit can be obtained at speeds far below gigabit or even hundreds of megabit speeds. In fact, at the moment, user experience, on a single user or per-user basis, beyond 10 Mbps to 15 Mbps, is negligible to non-existent.  

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