Comcast set to double broadband speeds

by Ryan Radia on October 21, 2008 · Comments

Major speed enhancements are rumored to be coming soon from Comcast, which has been spending serious cash to upgrade its network to the DOCSIS 3.0 standard. Customers in many markets who now pay $42.95 a month for 6mbps/1mbps service will be upgraded to 12/2 — a doubling of both upstream and downstream speeds — with no corresponding price increase. This follows Comcast’s pattern of enhancing speeds without hiking prices. And the price point of the standard tier has remained unchanged in nominal terms for several years, so when you factor in inflation, it’s fair to say Comcast has actually been dropping prices.

It’s amazing to consider how broadband speeds have evolved in a relatively short period of time. Comcast’s highest tier was a mere 4mbps/384kbps just four years ago, when DSL speeds typically topped out at 3/768. For consumers who live in a competitive ISP market, DSL now offers 20/1, Fiber offers 30/5, and Cable will soon offer 22/5. All of these tiers are priced under $100 per month.

Though we may not be amidst a “price war” among ISPs per se, as Mike Masnick recently argued, there is simply no denying that price per megabit is declining rapidly. This is all thanks to competition, of course, which has pushed providers to invest in newer technologies that allow for faster broadband connectivity.

Market skeptics will assuredly respond to my optimism by pointing out that so long as Comcast sticks with its 250GB monthly usage cap, consumers are really just getting the same service with shinier packaging. Yet that fact hardly means we should scoff at Comcast’s new performance tiers.

As I’ve discussed on several occasions, I churn through a lot of file transfers each month, so I’m all for Comcast raising its cap (or, alternatively, implementing reasonable overage fees). But even with Comcast’s fairly generous limits, who isn’t ecstatic about being able to download any file in half as much time as before? Caps will surely evolve over time as demand for 1080p content delivered over the Internet grows, but for now, speed is a bigger concern than usage for most consumers.

Comments Posted in: Broadband & Neutrality Regulation, Telecom & Cable Regulation

Bandwidth prices fall sharply

by Ryan Radia on October 9, 2008 · Comments

A new report from TeleGeography finds that bandwidth prices for backbone transit continue to decline rapidly across the globe. In San Francisco, for instance, the price per mbps of Gigabit Ethernet transit has dropped 38 % in the past 12 months. Developing countries are also enjoying substantial price cuts in 15 to 20% range.

But if the Internet’s core is controlled by an oligopolistic cartel—as Tim Wu argued in a recent New York Times essay—then why does bandwidth keep getting cheaper?

Perhaps it’s because the fourteen or so firms which offer backbone IP transit are competing fiercely to win over business from smaller carriers and enterprises. And as businesses of all sizes demand faster connectivity, more dark fiber is being lit, creating an expansion in network capacity. In DC, for instance, a price war has made high-speed commercial data services much more affordable, with one communications provider offering converged 10mbps full-duplex dedicated Ethernet over copper for less than the market price of four bonded T1 lines.

Why are some providers moving towards data transfer caps if bandwidth prices are dropping ? In part, it’s because backbone transit is not the only usage-variable expense that residential ISPs face. Last-mile bandwidth remains a highly contested resource in many neighborhoods, and the cost per megabit of bringing faster speeds to the doorstep far exceeds the cost of adding more wavelengths to a long-distance fiber optic line. As consumers demand greater speeds, providers are investing heavily in network upgrades—these costs are adding up, and there’s a strong case to be made that heavy users ought to shoulder a larger portion of the burden than light users.

Comments Posted in: Uncategorized