In High Speed Access, Another Turning Point has been Reached

Cox Communications says its new consumer gigabit Internet access service is now available in parts of Phoenix, Arizona; Orange County, California; Omaha, Nebraska and Las Vegas, Nevada. Cox announced it would do so a year ago.

Cox also is actively deploying “Gigablast” service to parts of Arkansas, Louisiana, Rhode Island, Oklahoma and Virginia, with service set for commercial launch later in the summer of 2015.

Perhaps more important, Cox's consumer gigabit service will be available in all of its markets by the end of 2016.

Separately, CenturyLink says it will deploy gigabit access in 2015, in addition to deployments in 10 markets, while growing the number of locations able to buy 20 Mbps and 40 Mbps by more than 45 percent over the prior year.

In conjunction with the Comcast (the largest U.S. Internet service provider by subscribers)
introduction of gigabit service to all of the 21 million U.S. homes passed by its network, the Cox announcement might represent one of those turning points we occasionally see in the communications business, namely the shift of a market from “bleeding edge” to mainstream.

It has happened before. The early leaders of the U.S. dial-up Internet access marker were not the telcos you would expect. Instead, it was new entrants, ranging from AOL in the consumer to a trio of business-focused Internet service providers (Northpoint, Rhythms Netconnections, Covad Communications).

As the market proved to be large and important, it was first telcos, and then cable TV companies, that came to dominate the segment.

As important as the Google Fiber challenge has proven to be, in terms of changing consumer expectations, it is the largest ISPs who will do the heavy lifting, as always is the case.

And that is why it matters when the largest ISPs decide they will deploy a service. No matter how many small operators decide to do something, even high take rates will not “move the needle” on adoption. Only when the largest suppliers, with the most market share, decide to move an a market really change.

That is about to happen. And the key change will not necessarily be the numbers of consumers who actually buy gigabit speed services. Most likely will not. But most are going to start buying services up to an order of magnitude faster than they had previously been using. And that is going to move the needle.
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