The Mere Threat Of Google Fiber Has Time Warner Cable Offering Speeds Six Times Faster At The Same Price

from the behold-the-magic-competition-fairy dept

Like so many other incumbent ISPs, Time Warner Cable has grown all-too comfortable with the lack of broadband competition it enjoys across most of its territory. Some markets are worse than others, usually not-coincidentally directly tied to the level of regulatory capture in a region. In the Carolinas, the company has worked tirelessly to protect its regional monopoly and duopoly, passing a bill in North Carolina (on the fourth try) preventing towns and cities from improving regional broadband. Company execs have also downplayed the rise of gigabit broadband, proudly informing users they don't really want faster, cheaper services.

Now Time Warner Cable is facing the worst-case scenario for a government-pampered duopolist. One, the FCC has moved to pre-empt Time Warner Cable's protectionist law in North Carolina, arguing it hinders the deployment of broadband services in a reasonable and timely basis. Two, Google Fiber recently announced it will be expanding $70, gigabit services (you know, the ones users don't need or want) into Raleigh, Durham and Charlotte sometime in the next year. The one-two punch of regulators thinking independently and increased competition has to be a nightmarish hellscape for company executives.

Time Warner Cable has of course responded by announcing it is increasing speeds in Charlotte and Raleigh six fold (to 300 Mbps) at no additional charge sometime this summer:

"Starting this week, customers will receive communications from TWC outlining the first phase of the project as the company begins the process of creating a 100% digital network..."With ‘TWC Maxx,’ we’re essentially reinventing the TWC experience,” said Darrel Hegar, regional vice president of operations, Time Warner Cable. “We will boost Internet speeds for customers up to six times faster, add to our robust TWC WiFi, dramatically improve the TV product and set a high bar in our industry for differentiated, exceptional customer service."

That's on the heels of an AT&T announcement that it would be offering its own $70, gigabit service in parts of North Carolina (it's $110 or more in non Google Fiber markets). Funny how this whole competition thing works, huh? Granted the whole concept of responding to price competition is new to some of these folks, so there's obviously some initial kinks to work out as these companies figure out what the concept means.

For example, Time Warner Cable's 300 Mbps down, 20 Mbps up tier will run you $65 promotional, $108 regular price -- notably slower and more expensive than Google Fiber's symmetrical 1 Gbps, $70 a month offering. Similarly, AT&T's service is very selectively deployed (mostly high-end developments) and the company is only willing to match Google Fiber's price point if you agree to deep packet inspection snoopvertising. Meanwhile, while Google Fiber pricing is generally straightforward, both AT&T and Time Warner Cable still employ a wide variety of obnoxious fees to drive up the advertised price post sale.

That's of course the best part about real broadband competition. You actually have a choice, and can respond to slow speeds, abysmal customer service, net neutrality violations and other shenanigans by voting with your wallet. The downside? Google Fiber's only available in a handful of markets, hopefully putting the onus on other companies to follow Google Fiber's lead and start lighting a fire under the posterior of a broadband industry that's just screaming for some disruption.

Filed Under: competition, google fiber, innovation, north carolina, speeds
Companies: google, time warner cable

AT&T Shows Cupertino Precisely What Broadband Competition (Or The Lack Thereof) Looks Like

from the fiber-to-the-press-release dept

As many of you may know, AT&T has been responding to Google Fiber with a gigabit broadband deployment of its own, primarily aimed at high-end housing developments where fiber is already in the ground. Dubbed AT&T U-Verse with "Gigapower," the service first appeared in Google Fiber markets like Austin, though AT&T tried to claim this timing was entirely coincidental. As with similar offerings from companies like CenturyLink, it's part of an industry push to at least give the impression that they're keeping pace with Google Fiber and gigabit municipal broadband deployments, even if the announcements often tend to be more impressive than the actual deployments (something I affectionately call "fiber to the press release").

Given this is AT&T, there are of course several caveats. One being that the company's promise to deploy the service to "up to 100 cities" is a bit of a bluff aimed at making the telco appear cutting edge, since it's actually consistently slashing its fixed-line investment budget. The actual deployment is much, much smaller (as in a few housing developments in a dozen markets or so), and AT&T's ambiguous projection numbers tend to ebb and flow depending on what AT&T's trying to get from the government. The other is that users need to pay $40 to $60 more if they want to opt out of AT&T's "Internet Preferences" snoopvertising, which uses deep packet inspection to track online behavior down to the second.

In short, yes it's competition -- but it's AT&T's special brand of competition. Still, it highlights the fact that Google Fiber markets very quickly see a much-needed industry response on both speed and price. Case in point: in the markets where Google Fiber is present, AT&T's gigabit offering costs significantly less, whether it's a standalone gigabit line, or a bundle. For example, this is the pricing seen by an AT&T customer in Austin, where Google Fiber is present:
Last week, AT&T launched the service in select parts of Cupertino, California where there's no Google Fiber pricing pressure. This is what local Cupertino users see when they try to sign up for service:
So yes, it's pretty clear it doesn't take much for pampered duopolists to respond to real price competition. The problem is despite the fact that Google Fiber is nearly five years old, its actual footprint remains fairly small, with only portions of Austin, Provo and Kansas City online so far. And that's a company with billions to spend and a massive lobbying apparatus that can take aim at the sector's regulatory capture. That's why community broadband and public/private partnerships become such an integral part of trying to light a fire under the U.S. broadband industry, as are the attempts to dismantle ISP protectionist state laws aimed at keeping these speeds and real price competition far, far away from most U.S. broadband markets.

Filed Under: broadband, competition, cupertino, fiber, google fiber, pricing, speeds
Companies: at&t, google

Cable Industry Fights New 25 Mbps Broadband Definition Because The Need For Those Speeds Is 'Hypothetical'

from the please-don't-make-us-work-for-our-money dept

We recently noted how the FCC has been making a push to bump the current definition of broadband from where it sits now -- around 4 Mbps downstream, and 1 Mbps upstream -- to a more modern 25 Mbps downstream, 3 Mbps upstream. Carriers have of course been crying a lot about this, given it will more clearly highlight the lack of effort they've been making -- especially in the less competitive markets. While U.S. broadband competition is pretty pathetic across the spectrum, several studies lately have shown it's particularly bad anywhere above 10 Mbps.

Quite unsurprisingly the cable industry has come out in strong opposition to the FCC's plan in a new NCTA filing (pdf) with the agency:

"...the two parties that specifically urge the Commission to adopt a download speed benchmark of 25 Mbps—Netflix and Public Knowledge—both offer examples of applications that go well beyond the 'current' and 'regular' uses that ordinarily inform the Commission’s inquiry under Section 706" of the Telecommunications Act. Hypothetical use cases showing the need for 25Mbps/3Mbps "dramatically exaggerate the amount of bandwidth needed by the typical broadband user," the NCTA said."

Because really, what kind of boob would want to draft a broadband standard that looks toward the future, right?

Of course, you'd think the cable industry would actually want a higher broadband definition, since its relatively-easy-to-deploy DOCSIS 3.0 (and soon 3.1) technology can achieve those speeds quite easily. That would give them a policy leg up against DSL providers, many of which have struggled with the significantly more expensive upgrade from copper-based network to fiber. And not too surprisingly, Verizon, AT&T and companies like CenturyLink are against raising the standard definition for just those reasons. But there's something else at play here as well.

If you read Techdirt, you know that DSL providers like AT&T and Verizon are actually backing away from DSL they don't want to upgrade on a massive scale, meaning we're entering an era where the cable monopoly is going to be stronger than ever across huge swaths of the country. Under Congressional mandate, the FCC is required to ensure broadband is being deployed in a "reasonable and timely basis." If the data shows it isn't (and that's precisely what the data shows), it gives the FCC legal ammunition in all the current heated broadband fights (net neutrality, municipal broadband). A legally-grounded FCC means less leeway for this growing cable monopoly to abuse its dominant market position, which is why the cable industry would very much like to keep our broadband definition buried somewhere in 2002.

Filed Under: broadband, fcc, speeds
Companies: comcast, ncta

Yet Another Study Proclaims U.S. Broadband Awesome If You Intentionally Ignore All The Warts

from the damn-lies-and-statistics dept

To be clear, the United States is indisputably mediocre when it comes to broadband. It doesn't really matter if you look at data from FCC, the the OECD, OOkla's Net Index or walk next door and ask your neighbor. We're average or worse on metrics like speed (three quarters of the country has no competitive option at speeds faster than 25 Mbps), penetration, price and adoption, and we're among the worst anywhere when it comes to customer service. In fact U.S. broadband customer service is so bad, people rank the IRS, banking industry, insurance companies and the airlines higher.

That said, it's endlessly amusing to watch the broadband industry (and its varied assortment of fauxcademics, sock puppets, think tankers, lobbyists and PR tendrils) time and time and time again declare that U.S. broadband is secretly incredibly awesome, and the people stuck paying $100 for a sub 3 Mbps DSL connection and mandatory (though unwanted) landline aren't looking at the numbers right.

The latest study of this type comes courtesy of our friends over at the Verizon, Comcast and AT&T funded American Enterprise Institute, whose latest analysis (pdf) compares U.S. broadband to only other G7 countries, since a broader global comparison makes us look worse. Unsurprisingly, the AEI finds we're competitive under this criteria if you look at specific metrics in just the right way, ignore all previous studies, tilt your head just the right way, and ignore the industry's awful customer service. The study resulted in websites like Vox recently running articles with headlines like "American broadband is better than you think." Much of the AEI data is sound, it's just highly selective and selectively re-arranged.

For example the study is quick to point out that the United States has done a better job at deploying the latest DOCSIS 3.0 cable network upgrades than other G7 countries. That's not particularly surprising. The predominant connectivity option overseas is DSL, which costs significantly more to upgrade to fiber to the home, while U.S. cable networks were relatively inexpensive to upgrade to DOCSIS 3.0 (Comcast is on record stating DOCSIS 3.0 upgrade costs were "the kind of money we can find in the sofa cushions"). The fact that we're leading in a highly specific metric certainly makes a very lovely chart:The fact the United States leads in DOCSIS 3.0 deployment becomes less sexy when you realize that two-thirds of U.S. consumers still only have one competitive choice when it comes to speeds above 25 Mbps. That one choice is thanks to (you guessed it) DOCSIS 3.0 upgrades, which while an improvement still lag on the upstream side of the equation, which is why your cable speeds tend to be so top heavy (say 30 Mbps downstream, 2 Mbps upstream). But while the United States has more cable in the ground than Europe sounds nice, it's kind of like observing that Europe has different trees. It's perhaps notable, but doesn't refute U.S. broadband mediocrity. Also worth noting (since the study doesn't): companies like AT&T and Verizon in the U.S. are simply giving up on DSL in many markets, leaving cable the only game in town.

Similarly, the study makes a big deal out of the fact the United States leads many G7 countries when it comes to the number of total fiber based connections, a metric that includes fiber to the home connections like Google Fiber, and the slower and much less costly fiber to the node connections like AT&T U-Verse. Of course, all G7 countries (sans Japan) have struggled with broad fiber deployment, since it's very fashionable to throw subsidies at your regional incumbent telco for fiber, then hope for the best. According to the Fiber to the Home Council website, there are now 640,000 North American households receiving fiber to the home service with connection speeds of at least 100 megabits per second after a generation of broadband subsidies. Hooray for us, I guess?

The study makes light of all price studies that came before it, arguing that every earlier study and stat firm in the world managed to get their broadband price calculations wrong, but a think tank employed in part by the nation's largest ISPs has cornered the market on sound broadband pricing analysis. AEI appears to be largely fixated on a recent study by the Open Technology Institute, which noted that U.S. cities are falling behind when it comes to broadband pricing (with the exception of cities that build their own networks like Chattanooga):

"Our findings show that the average cost of plans in nearly every speed tier we selected is higher in the U.S. than in Europe, and seven of the nine U.S. cities surveyed for the report have average prices that are higher than the median for plans offered between 25 and 50 Mbps download speeds...We found similar results when comparing the average speed of plans ranging from $35 to $50, and the average data cap for mobile broadband plans ranging from $35 to $45."

U.S. incumbent broadband pricing has long taken a particular beating when compared to places like Paris, where regulators took our discarded idea of local loop unbundling (opening up the incumbent networks to third party competition) and made it work. The result? Stories like this, where people visit Paris and are shocked to learn that Parisians can get 100 Mbps broadband, 250 cable channels, home phone service and a wireless phone with 3 GB of data -- for $63 a month. Yet to hear the AEI study author tell it in a blog post, France got it wrong, and the U.S. (where those same services will likely run you $250 or more a month) has it oh so right:

"In reality, the nations that have treated broadband networks as public utilities are high on promises and low on results. France and Italy are the truest examples of the utility model for broadband; wired broadband in France is no faster than mobile broadband, and Italy has the slowest networks in the G7. Both Italy and France have promised heavy subsidies to broadband carriers for upgraded networks, but austerity measures and other budget constraints have prevented the subsidies from materializing. Overall, broadband users in the US, Japan, and Canada have the best services, and those in Germany, France, and Italy have the worst among G7 nations. Careful examination of the data shows that the US is fundamentally on the right track; policy makers are well advised to stay the course."

Stay the course! Maintain the status quo! Ignore the lumpy fat man behind the curtain! The study takes the very long way home to ultimately conclude that America's actually doing a really good job at broadband, and therefore the sector should be deregulated even further. Obviously you can manipulate any data set with enough elbow grease and pie charts. That certainly works for broadband, at least until you actually go visit some of these duopoly markets (like my former hometown of Binghamton, NY) where your only choice is aging, over-priced DSL, or slightly faster, over-priced cable service -- both with an extra helping of abysmal service and disdain for the customer.

Everybody all together now: we're number one! We're number one! We're number one!

Filed Under: broadband, cost, g7, selective reasoning, speeds, study, us