Cable's Future Network Will be Flatter

About 1/2 of 1 Percent of Time Warner Cable Customers Buy 50 Mbps Service

It's likely fair to keep in mind, as ISPs, regulators and policy advocates ponder future service offerings at speeds of 100 Mbps, or even higher, that few U.S. consumers appear to want to buy service at speeds of 50 Mbps or higher.

Time Warner Cable  added 212,000 high-speed Internet subs in the first quarter, with about 1,000 buying the ultra-high-speed Docsis 3.0 services. That represents about one half of one percent of new customers, roughly in line with the few figures that have emerged from other ISPs able to sell 50 Mbps to 100 Mbps access services in Europe or North America.

The number of wideband subscription adds in the first quarter are consistent with recent trends at TWC, the only major US MSO so far that's even been willing to share those numbers. In January, TWC said it added only about 2,000 wideband subs in the fourth quarter of 2009.

Comcast, which has 80 percent of its plant wired up for wideband and intends to finish the job later this year, hasn't disclosed any D3 subscriber figures.

AT&T noted during its first quarter conference call that 59 percent of its customers buy access at speeds of at least 3 Mbps. What that might suggest is that most consumers still do not buy ultra-fast connections, preferring medium-speed connections instead.

Suddenlink Launches 107 Mbps Broadband Access Service

Suddenlink, an operator of rural and suburban cable TV systems, says it has started offering residential customers in several, suburban-Austin communities (Georgetown, Pflugerville, and Leander) its new “High Speed Internet MAX 107.0” service, featuring a download speed up to 107 megabits per second (Mbps) and an upload speed up to 5 Mbps.

The MAX 107.0 service is the result of “Project Imagine,” a new Suddenlink program that calls for approximately $350 million of capital investments nationwide through 2012, above and beyond the company’s traditional capital spending levels.

Through “Project Imagine,” the company aims to expand to substantially all Suddenlink communities: video-on-demand service; the capability for up to 200 high-definition (HD) TV channels; and industry-leading DOCSIS 3.0 technology, which enables Internet download speeds of 20, 50, and more than 100 Mbps.

Suddenlink is preparing to launch either MAX 107.0 or MAX 50.0 Internet service in a number of other communities this year, with details to be announced later. MAX 50.0 service will feature a download speed of up to 50 Mbps.

That will give Suddenlink bragging rights in the speed wars. What remains unclear, as has been the case for other providers offering 50 Mbps service, is how many customers actually will buy the fastest speeds, rather than lower-speed and medium-speed services.

So far, no U.S. provider of access at speeds ranging from 50 Mbps to 100 Mbps has been willing to say, in public, what percentage of customers buy such plans, or even the actual number of customers who buy. One suspects that is because relatively few consumers actually think they need such speeds, or that the value-price relationship is better than that of the medium-speed services.

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100 Mbps "Can't be Done"

I learned long ago that when somebody says something "can't be done," it is best to understand that claim as "I can't do it." I think we also have learned that even when somebody says something can be done, they might mean "it can be done so long as not that many people want to do it."

And that might be the case as cable operators prep broadband access services capable of running at speeds as high as 250 Mbps, at least so long as most people do not desire to buy services running at such speeds.

Broadband Reports says cable operators will start talking about a 250 Mbps service sopmetime later this year, though nobody will be able to buy it. Comcast also says it will be offering 100-Mbps service to about 25 percent of its potential customers by the end of 2010.

Comcast should be congratulated for that move, though it is not clear what might happen if lots of people actually bought it.  The rub is that providing 250 Mbps requires bonding of about eight standard 6-MHz channels.

The issue there is the same problem satellite operators have when providing downstream bandwidth. There are finite numbers of channels available, so cannibalizing bandwidth for data services reduces the amount of bandwidth available for video services.

The point is that some providers--particularly cable operators--will be able to claim speeds of at least 100 Mbps, at least in terms of what is commercially feasible at low penetration. it isn't clear any network can support 100 Mbps at high penetration, at least not at prices in two, rather than three digits.

Still, it is a reminder that when somebody says something "can't be done," one has to consider the source. Just because one company can't do it does not mean all companies cannot do it.

The other relevant observation is that "hero" devices and services are feasible. What is not clear is whether "mass market" availability is possible.

http://www.dslreports.com/shownews/Comcast-Exploring-250-Mbps-Service-107002