FiOS and U-verse challenge cable?s broadband domination

It seems like the cable companies – expensive, unresponsive, low-wage, lightly regulated – have come to dominate the broadband market. But to some experts, the words is seems.

Craig Moffett of Moffett Research LLC, and long-time cable advocate,  recently said that the exception is Verizon’s FiOS. He wrote, “FiOS will sustain subscriber growth longer than either we or Verizon had projected, and that FiOS will ultimately achieve higher penetration rates than either we or Verizon had originally targeted.”

While FiOS’ fiber to the home covers only 14 percent of U.S. homes, it poses a competitive threat to several major cable companies. FiOS overlaps with 14 percent of Time Warner Cable and 19 percent of Comcast, but is most competitive with Cablevision, where it overlaps in 64 percent of its subscriber area.

And that threat isn’t just theoretical. Even as Verizon has cut back on its FiOS build-out, Moffett concludes that even where it has been competing for seven years, “FiOS still saw growth rates of 6.4% on 2012.” Moreover, there are now five million FiOS video customers, and FiOS Quantum Internet service now offers speeds 500 mbps down/100 mbps up.

At the same time, AT&T is upgrading the speeds of its broadband/TV package, U-verse. According to the company, “AT&T U-verse customers in 40 markets across 15 states can now get home High Speed Internet at speeds of up to 45 Mbps downstream and up to 6 Mbps upstream.”

The top-speed package is known as Power, and was introduced in areas of California and Nevada recently. According to one report, “The new Power tier offers downstream speeds as high as 45 Mbit/s, nearly twice as fast as U-verse’s previous top service, and upstream speeds as high as 6 Mbit/s.”

Although a big jump for U-verse subscribers, speeds are still below both Verizon’s FiOS and the fastest Data Over Cable Service Interface Specification (DOCSIS) being offered by many cable carriers. However, AT&T plans further speed increases in the near future. “Under Project Velocity,” wrote Light Speed, “AT&T also aims to expand U-verse’s broadband reach by another 8.5 million homes, increasing its total footprint to 33 million households.” At present U-verse has some 9 million subscribers.

Speed Matters supports competition in broadband, leading to greater consumer choice and improved speed and access.

Moffett: FiOS Will be an Ongoing Cable Threat (telecompetitor.com, Aug. 14, 2013)

Craig Moffett Suddenly Thinks FiOS Is Great (DSL Reports, Aug. 23, 2013)

45 Mbps U-verse Internet Service Arrives in 40 Additional Markets (AT&T news release, Aug. 26, 2013)

AT&T U-verse Steps on Gas (Light Reading, Aug. 26, 2013)