The Loveland, Colo. City Council decided to proceed with building a municipal broadband network, offering symmetrical gigabit services, without a public vote planned for the spring of 2019.
The City of Loveland has an estimated population of 76,701, 32,097 residential premises and 4,600 business premises. Comcast is the leading provider of internet access service in Loveland, at nearly 69 percent residential share and 64 percent of business accounts.
As often happens, would-be attackers find their would-be competitors react to new market entry by changing their value propositions. So where Comcast once offered service at speeds up to 150 Mbps, it now appears Comcast offers speeds up to 1 Gbps.
CenturyLink also appears to have upgraded to about 900 Mbps as well. The point is that the initial market research occurred at a time when Comcast’s top speeds might have been in the 150 Mbps range, while CenturyLink’s speed was 140 Mbps or less.
In addition to speed, the incumbents logically will try to bundle other elements of value (discounts for multi-product accounts), hotspot access and bundled service pricing to cope with new competition from the city.
Loveland originally estimated that 42 percent of residents and 27 percent of businesses would choose to sign up for the city-offered service. Since the network upgrades by Comcast and CenturyLink, that might well be questioned.
The city’s original thinking was that, in addition to gigabit speeds, lower-speed tiers might be offered, ranging in price from $20 per month to $80 per month for residents, and from $50 per month to the highest rate of $800 per month for a dedicated line for businesses.
In some cases, a municipal broadband network might take so much market share that one of the two incumbent providers (telco or cable) is forced from the market. In the case of Loveland, it appears the incumbents already have moved to preempt much of the demand by increasing speeds and adjusting prices.
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