Charter Turns Internet Dial To 60 Mbps1/28/2009 11:33 PM Eastern
Looking to grab broadband bragging rights, Charter Communications this week will launch 60-Mbps downstream Internet service in its home market of St. Louis.
The Ultra60 service -- the fastest residential service available from any cable or telecommunications company in the U.S. -- will initially be available to 100,000 homes in western St. Louis County and surrounding areas. The company expects to enter other markets with the service, which will provide upstream speeds of up to 5 Mbps, later in 2009.
The service uses the cable industry's next-generation modem technology, DOCSIS 3.0, to combine multiple channels together to provide higher connection speeds.
"The strategy that we have always followed and implemented is that we want to be the speed leaders in the markets we serve," Charter chief technology officer Marwan Fawaz. "Launching a DOCSIS 3.0 product allows us to not just keep that lead but expand it."
Separately, it looks increasingly likely that Charter is heading for bankruptcy. Having the operator tout itself as the fastest broadband provider in the country could help soften the public-relations blow of announcing a major restructuring.
Ultra60 will cost $129.99 per month bundled with TV or phone and $139.99 per month as a standalone service.
In St. Louis, Ultra60 will blast past the telco competition, AT&T's U-verse Internet DSL, which provides top downstream speeds of 18 Mbps.
By cranking up to 60 Mbps, Charter also will be able to claim -- for the time being -- that it can speed past Verizon Communications' FiOS Internet service. The telco, which competes with Charter in parts of California and Texas, offers 50 Mbps downstream to around 10 million homes.
Also maxing out at 50 Mbps is Comcast, which has been the most aggressive MSO in deploying what it calls "wideband" cable-modem service. The biggest U.S. cable operator is offering 50-Mbps tiers to 10 million premises in markets including Chicago, Philadelphia, Boston, Atlanta and Seattle for $139.95 per month with cable TV service.
Is the 60-Mbps watermark about bragging rights? "That's fair to say," Fawaz replied. "We don't want to necessarily match our competitors -- we want to beat them.... Competitively we think it's the right speed in our markets."
He noted that DOCSIS 3.0 technology allows speeds even greater than that, theoretically providing 160 Mbps downstream via four bonded channels and more than 300 Mbps with eight.
DOCSIS 3.0 will help cable operators defensively in areas where Verizon offers FiOS and let them play offense where DSL is the rival.
"You have to match Verizon step for step," said Patti Reali, an independent cable industry analyst. And while the slumping economy will make a premium-priced service a tough sell, "there will still be a segment of the market that will look for a Cadillac service," she added.
As part of upgrading to DOCSIS 3.0, Charter expects to increase the top speeds of its Max tier from 16 Mbps to 20 Mbps downstream in all its markets.
According to Fawaz, Charter will not impose bandwidth-usage caps on any of its high-speed Internet subscribers. By contrast, Comcast's policies limit users to 250 Gigabytes of data consumption per month.
Charter's marketing for Ultra60 will be locally focused and include ads in billing statement, e-mails, cross-channel spots and radio promotion.
In pitching Ultra60 to customers, Charter will underscore its superiority to DSL -- providing a connection about 40 times as fast -- and its ability to let subscribers perform multiple activities at once (such as downloading music, watching a movie trailer, and surfing the Web all at once).
However, for now, most U.S. consumers are happy with their existing broadband service, according to a recent survey of more than 1,000 consumers by research firm In-Stat. Most people seemed to be just fine with 5 Mbps of actual measured download speed, said Gerry Kaufhold, principal analyst with In-Stat, which like Multichannel News is owned by Reed Business Information.
"It's unlikely that 60 Mbps -- or anything in excess of 10 Mbps -- is going to have much market traction to get people to switch their broadband carrier," he said.
Fawaz acknowledged that not every Charter broadband subscriber will be upgrading to the DOCSIS 3.0-based services. But, he said, "We feel there's a portion of the customer base that will want it. Probably not a huge number, but enough to make it interesting."
Charter is using the DOCSIS 3.0 modular cable modem termination system from Cisco Systems in its headends. The MSO has qualified three cable modems, from Motorola, Cisco and Ambit Microsystems.
In conjunction with the Cisco modular CMTS, Charter will use two universal edge QAM platforms, Harmonic's Narrowcast Services Gateway and Cisco's RF Gateway 10.