Length: 22 Pages
Consulting Analyst, Heavy Reading
Craig is a veteran cable industry writer, speaker and market analyst, and a regular contributor to Heavy Reading...MORE
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Length: 22 Pages
To Gigabit or not to Gigabit – that is the question. For the past several years, the cable industry has been struggling with the question of whether cable providers should jump aboard the movement to provide Gigabit-level Internet speed to the communities they serve. The question largely has been driven by Google Fiber's Gigabit residential service, subsequent responses by AT&T and other competitors, the federal government's advocacy and widespread interest by municipal governments.
As companies lean toward the "to Gigabit" answer, they are faced with new questions about the best way to roll it out. Cable providers can employ several key strategies, each guided by a variety of factors, costs and goals. Without careful management of Gigabit services, which are likely to come with hefty subscription prices, cable providers could fail to get an adequate return on their investment.
In the near term, multiple system operators (MSOs) will rely on hybrid approaches that mix elements of each strategy. Since the MSOs still operate regional or local systems with varying technological capabilities and market conditions, there is no easy "one-size-fits-all" solution. Companies will ramp up speeds based upon several criteria, including technical readiness, competitive pressure, upgrade costs and customer demand. This selective approach will help to manage technology costs and target top-tier customers.
The regulatory climate also is playing a role. Internet service providers, newly minted by the FCC as Title II providers, are consolidating at a time when government leaders are advocating Gigabit Cities and higher U.S. broadband speeds. AT&T, as part of its deal to acquire DirecTV, promised an extensive rollout of Gigabit Internet service through fiber buildouts over the next four years. Charter, which is acquiring TWC and Bright House Networks, and Altice, which is buying Suddenlink, have not made similar concessions, though both have publicly voiced support for higher speed Internet.
The Gigabit Internet movement is being driven more by marketing interests, competitive maneuvering and politics than by actual technological need. But the cable industry cannot ignore the forces that have dragged it into the latest round of escalating speed wars. The competition from Google Fiber, telcos and others will continue unabated. Cable providers must respond.
Cable has the right arsenal to remain competitive with Google Fiber, telcos or other providers. Years ago, many bet against the cable industry as HSI took on telco DSL. Today, HSI is thriving and DSL is struggling. While it is logical to question the long-term viability of HFC plant, Docsis 3.1 promises to take its capabilities to new heights and cable can use fiber connections on a demand-driven basis to target those who actually need and will pay for Gigabit speed.
What Is Cable's Right Path to Gigabit Internet? provides an update on Gigabit Internet, the competition between cable and other providers and four strategies that cable operators are employing. It includes profiles of seven suppliers that are supporting cable Gigabit Internet services with Docsis, fiber and other products.
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The debate over the need for Gigabit Internet rages on even as service providers push forward with new offerings. Skeptics continue to doubt whether residences, in particular, need that much speed and whether laptops and other devices gain any advantages from it. Advocates of Gigabit Internet contend the industry will be future-proofing its delivery systems for the ever-increasing onslaught of Internet applications, soon to grow even more with the mounting consumption of online video, 4K Ultra HD and the IoT.
What Is Cable's Right Path to Gigabit Internet? is published in PDF format.