The Bauminator

1 Gig for $35

4/29/2013 6:03 AM

While Google’s $70 per month 1 Gigabit per second service in Kansas City continues to grab plenty of headlines, a rural telco in Vermont is building out a fiber-fed service that offers similar speeds but at about half the price.

Vermont Telephone Company (VTel) is tapping about $94 million in federal broadband stimulus funding to deploy 1 Gig speeds to a footprint covering 17,500 homes, and has already signed up 600 customers, according to The Wall Street Journal. The company’s 1 Gig service runs $34.95 per month as a stand-alone, or $29.95 a month when coupled with its local and long distance phone service. Vtel is pitching its DSL service, with speeds up to 24 Mbps, for the same price as the 1 Gig packages.

VTel chief executive Michel Guité  tells the paper that the telco has already strung 1,200 miles of fiber in several rural counties over the past year, and expects to have 1 Gig running across its entire footprint later this year.

That will amp up the competition with Comcast,  the incumbent cable operator in most of the 14 rural Vermont villages served by family-owned, Springfield, Vt.-based Vtel. Comcast, meanwhile, has recently doubled the speeds of its two most popular Internet service packages – its Blast tier now maxes out at 50 Mbps downstream by 10 Mbps upstream, while its old Extreme 50 package now tops out at 105 Mbps down by 20 Mbps up.

VTel isn’t the only competitor that bringing 1 Gig speeds to Comcast territory. Among other examples, Google Fiber has received city approval to deploy its network to Olathe, Kan., and has a deal in place to purchase the iProvo network in Provo, Utah.  Comcast is also facing off with a municipally-owned 1 Gig network in Chattanooga, Tenn.   

The low price of Vtel’s 1 Gig service is what’s grabbing attention at the moment. But even the telco isn’t convinced that the financials will pan out, with Guité  telling the WSJ that time will tell if it’s a “sustainable model.”

September