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Cable Technology Feature Article

December 09, 2008

Fifty Mbps Bragging Rights

By Gary Kim, Contributing Editor

As cable operators start to introduce faster broadband tiers based on the Docsis 3.0 standard, small and mid-sized business users are likely early adopters. Part of the reason is that few consumers will be able to wring much in the way of better experience out of upgrading to 50 Mbps if they can get 10 Mbps to 30 Mbps as an alternative. The other reason is that more business customers are likely to be willing to part with the extra money a 50 Mbps service costs.
Comcast is offering a business-class Internet tier in all markets where it introduces Docsis 3.0-based services, for example. Its "Deluxe 50" tier for business customers (50 Mbit/s downstream by 10 Mbit/s upstream) runs $189.95 per month, and ties in static IP addresses and communications services from Microsoft Corp.
Cablevision Systems (News - Alert) Corp. expects to deploy its Docsis offering in several months, but has not yet released details on pricing or actual tiers.
Today, the high-end tier of Cablevision's residential cable modem service tops out at 30 Mbps downstream and 5 Mbps upstream.
For the most part, 50 Mbps or faster tiers are marketing weapons more than anything else, as few customers seem to buy tiers running that fast. Still, because 75 percent of U.S. broadband subscribers would be willing to leave their current provider, according to a survey just published by analyst firm Strategy Analytics (News - Alert), marketing platforms remain important.
Strategy Analytics says Time Warner (News - Alert) Cable is the most susceptible to customer defections if a broadband price war breaks out, while AT&T and Verizon are both vulnerable to rival cable offers of faster broadband speeds, while Cox (News - Alert) Communications has the most secure customer base.
And though many observers continue to argue that the United States has a significant broadband access crisis, Strategy Analytics says the market largely is saturated, so customer defections soon will be the main way broadband providers can grow.
"As the U.S. broadband market matures, broadband service providers will increasingly compete for the same pool of customers," says Ben Piper, Strategy Analytics director. "The key focus will continue to evolve from one of new customer acquisition to retention and churn mitigation."

Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary's articles, please visit his columnist page.

Edited by Jessica Kostek