05.01.2009 02:23 PM
Cablevision seeks top speed for U.S. broadband

While its competitors engaged in a cat and mouse game of attempting to limit bandwidth and increase rates for its most savvy users, Cablevision last week unveiled the fastest home Internet connection in the nation.

The company said it would offer download speeds of 101Mb/s and upload speeds of 15Mb/s for a cost of $99.95 per month. That speed will be uncapped with no limitations. The new service will be available on May 11 to all 5 million of Cablevision’s subscribers, mainly in the New York City suburbs.

Cablevision will use Docsis 3, which offers cable systems greater data capacity at lower costs. The company spent $300 million for its upgrade to Docsis 3 and the deployment of Wi-Fi hotspots for use by its Internet customers around the New York region.

That investment comes to about $97 for each of Cablevision’s 3.1 million customers, or $60 for each of the homes passed. However, those numbers are quite low compared with the premium prices charged by cable companies for 50Mb and 100Mb services. In Japan, for example, J:Com uses the same technology to offer 160Mb/s service for about $60 per month.

Cablevision doesn’t expect the rollout to have much of an effect on its bottom line this year. It’s a long-term strategy, the company said, with the primary users initially being small businesses.

In the United States, the price of Internet connectivity remains higher than other nations around the world. Cable and phone companies have chosen to offer high-speed service at increased prices in an attempt to earn greater profits.

Cablevision’s competitor, Verizon Communications, offers a top speed of 50Mb/s for downloads and 20Mb/s for uploads with its FiOS fiber optical system. In most places, it sells the service at that speed for $140 per month, but has been offering the service at $90 per month in New York state, its primary battleground with Cablevision, as well as in Virginia and the District of Columbia.

Comcast, the nation’s largest cable company, is currently launching 50Mb/s service (with 10Mb/s for uploads) at $140 per month. Time Warner has said it will charge $100 for its 50Mb/s service, but it is rolling out higher speeds much more slowly that Comcast and Cablevision.

Cablevision’s announcement came after a recent fracas over broadband carriers making noises about instituting caps on heavy users. Time Warner Cable, Comcast and AT&T all expressed interest.

After saying that it found that about 30 percent of its users download less than 1GB of data each month, Time Warner Cable said it planned to test metered Internet service this summer in New York and North Carolina. Under the company’s proposed plan, top downloaders would have paid $150 a month.

Outrage exploded on Internet message boards and blogs against Time Warner. New York’s legislators joined the cause. The cable company eventually backed off of the plan.



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