Comcast says it will soon compete head-on with Google Fiber.
In a blog post today, the company announced plans to offer internet speeds of up to 2 gigabits per second to the majority of its nearly 22 million subscribers by the end of the year. That’s about twice as fast as the ultra-high-speed service Google is now offering in three US cities, and 80 times as fast as Comcast’s standard broadband internet plan.
“We’ll first offer this service in Atlanta and roll it out in additional cities soon with the goal to have it available across the country and available to about 18 million homes by the end of the year,” the blog post says.
Most remaining customers who aren’t able to take advantage of the two-gigabit service will eventually be offered Google-like one-gigabit speeds over traditional coaxial cable, according to the post.
Google began rolling out its one-gigabit fiber service more than two years ago, saying it wanted to push other ISPs into offering faster internet speeds. And this is now happening, at least on some level. For Google and others, the hope is that faster speeds will not only improve the performance of today’s internet application, from Facebook to Netflix, but also engender a whole new wave of more advanced online applications.
The rub is that Comcast’s offer may not result in widespread use of high-speed fiber. It must still lay fiber to individual homes, and customers may be asked to incur the cost—something they may not be willing to do.
The Price of Fiber
Comcast hasn’t discussed pricing for its new service. The company’s XFINITY Extreme 505 service costs $399.95 per month and offers speeds of about half a gigabit. However, competition from Google Fiber, which is planned to expand into Atlanta, may drive down prices in some areas. We’ve already seen this from AT&T, which offers gigabit fiber connections for $70 a month in Austin, Texas, where it competes with Google Fiber, but $110 in Cupertino, where it doesn’t.
The real sticking point may the the setup costs. Comcast already has fiber optic pipe running through much of the country, but providing links from these pipes into people’s homes—so-called “last mile” connections—could be an expensive process. Google has largely defrayed these costs by focusing on rolling out the service one neighborhood at a time to areas in which many people have signed up in advance.
What Comcast is promising is a service that will be widely available to everyone within proximity to its pipes, which suggests it will install the service on a per-household basis. While offering nation- and city-wide service sounds radical, if the costs are so high that only a few people can afford to have service installed, it becomes a much less impressive.
For those not within proximity of Comcast’s fiber optic pipes, the company is experimenting with a new hybrid cable/fiber solution called DOCSIS. “We hope to begin rolling out DOCSIS 3.1 in early 2016,” the blog post says. “And when fully deployed, it will mean almost every customer in our footprint will be able to receive gigabit speeds over our existing network.” That should be considerably less expensive to install since it will rely on the company’s existing infrastructure, but Comcast is being much less specific about who will receive this service and when.
Time Warner Deal Looms
But if Comcast is successful, it could be the first nationwide gigabit capable residential internet provider. Google Fiber has been expanding into more cities but is still, at present, only available in three metro areas, and is only available in select neighborhoods in those cities.
Likewise, other telcos like CenturyLink and AT&T have announced gigabit services in a select neighborhoods in a few cities. As mentioned, this helps keep costs down, but it drastically limits access. This would be the first time higher speeds have been widely available virtually everywhere that Comcast already services.
The announcement comes as Comcast angles to take over Time Warner Cable, a deal that is still pending approval by the Federal Communications Commission. The merger has been met with widespread opposition from consumer advocacy groups, and the FCC has delayed its decision to mid-2015, sparking speculation that the deal is dead in the water. But if Comcast can make the case that by taking over Time Warner Cable that it will be able to offer Google Fiber level speeds to even more customers, it might have an easier time swaying the courts.
From Two to Ten
It’s impossible know what the applications for such fast speeds would be. The ideas produced thus far have been largely banal. But that’s largely a chicken and egg problem, since there are so few people with fast enough speeds to take advantage of such services. As gigabit speed internet connections become more widely available, we can expect a whole new generation of innovations to take root.
And from there? Well, Google is already thinking about 10 gigabit services.