MSOs Declare Speed War Via Cable Modems


All summer long, as financial analysts questioned whether cable operators would have to lower cable-modem pricing to match offers from digital subscriber line providers, MSOs remained steadfast in their position: They would compete on service quality.

Last week, cable took the fight to a new level: Time Warner Cable, Comcast Corp. and Adelphia Communications Corp all said they would raise the downstream speeds of their respective high-speed offerings to 3 Megabytes per second, without raising prices.

Time Warner had been providing 2 Mbps of downstream capacity, via its Road Runner service and several other ISPs. Comcast High-Speed Internet had generally been providing 1.5 Mbps, while Adelphia's PowerLink had been offering about 2 Mbps.

The new 3 Mbps speeds from cable MSOs should be twice as fast as the highest speed advertised by phone-company digital subscriber line services: 1.5 Mbps.

The $30-per-month DSL services offered by BellSouth Corp. and Qwest Communications International Inc. offer service at only 256 Kilobytes per second. SBC Communications Inc.'s new $26.95 per month rate promises 384 Kbps, as part of package deal for other services.

Overall, most DSL subscribers receive less than one megabyte service, according to a recent Fulcrum Global Partners report.

All Time Warner Cable cable-modem customers (not just Road Runner subscribers) were switched over to 3 Mbps on Oct. 1.

"This is a great opportunity for our customers," said Jeff King, executive vice president at Time Warner Cable Network Services and Road Runner unit president. "We have expanded and improved connectivity to the Internet, and it made sense to give this to our customers."

After testing 3 Mbps in three markets over the summer, Comcast accelerated its rollout, saying last Thursday that it would launch the speed in an additional 11 markets. The MSO said that the majority of its systems would be upgraded for 3 Mbps service by year-end.

Upgrading L.A.

"In survey after survey, our customers tell us what they value most in an Internet service is speed," David Juliano, senior vice president and general manager of Comcast Online, said in a statement. "We're addressing this by providing a faster broadband speed at no additional cost."

Adelphia said it will increase the speeds available to its PowerLink high-speed Internet customers to up to 3 Mbps downstream and 256 Kbps upstream, for no additional charge.

The upgrades started Oct. 1 in Los Angeles, and will be followed by MSO-wide rollouts by the end of November.

Like Comcast, Time Warner Cable tested 3 Mbps service in four locations over the summer, then upgraded its plant to handle 3 Mbps nationwide, King said.

As part of the Road Runner service, Time Warner Cable operates a national backbone as well as five fiber "cable" rings — in Texas, North Carolina, Ohio, the Los Angeles basin and New York state.

Those rings have been upgraded with OC-192 gear, according to King.

"The most simplistic part is that the proximity has allowed us to interconnect divisions in our major states with fiber," he said. Expanded fiber capacity has been built into those rings as well as into points of presence that serve Time Warner systems outside those areas, such as frequent new-service test beds Green Bay, Wisc., and Portland, Maine.

"Now we have great capability to transmit that data within our divisions," King said.

Time Warner isn't raising rates despite the increase in speed.

"We already knew we were faster than DSL," King said, and this increases the ante. "We will have a marketing plan that will be catchy enough to get the attention of those who haven't thought about high speed."

Road Runner has always planned for growth, both in subscribers and bandwidth requirements.

"As we put more and more customers on the cable plant, we continuously upgrade equipment," said King. "We're always building towards the best experience possible."

The increase in speed will cover all ISPs that use Road Runner's network, including America Online and EarthLink. Upstream speed remains at 384 Kbps, one of the fastest in the industry, King said, but the MSO is eyeing 512 Kbps.

"We did some testing in the past, and continue to look at those results."

For its part, Comcast tested the higher speed in Atlanta, Pittsburgh and Knoxville, Tenn., over the summer.

On Oct. 2, 11 more markets were added: Detroit; Dallas and Savannah, Ga.; Hattiesburg and Meridian, Miss.; Independence, Mo.; Lake County and Panama City, Fla.; Mobile and Tuscaloosa, Ala.; and Muncie, Ind.

Comcast said it would add new markets throughout the fall, as systems are upgraded. Subscribers in the 14 markets need only to unplug their modems, wait 60 seconds, then plug them back in to enhance their speed, the MSO said. Upstream speeds will remain at 256 Kbps.

In addition to 3 Mbps, Comcast continues to push towards DOCSIS (Data Over Cable Service Interface Specification) 2.0. The MSO and Terayon Communication Systems Inc. last week announced the second phase of testing Terayon's DOCSIS 2.0 cable modem termination system. The tests will cover provisioning, operating profile selection and system integration.

RCN responses

While incumbent MSOs increase speed, their competition isn't sitting still. Overbuilder RCN Corp. said it would increase the speed of its high-speed data offering to 5 Mbps, at no added cost.

RCN said it began offering 3-Mbps speeds, dubbed "MegaModem," a year ago. Now, it's "raising the bar in the industry by offering MegaModem Mach 5, our 5 Mbps modem."

RCN said 1.5-MBPS subscribers would be upgraded to 3 MBPS on Oct. 15; current 3-MBPS subscribers would see speeds lifted to 5 MBPS.

Meanwhile, SBC announced yet another price cut for new DSL subscribers, to $26.95 a month, with a one-year commitment. The promotion, running through year-end, amounts to a 10% drop in price.