Comcast boosts Net access speed
Seeks edge in war with phone giants
Lobbing a new volley in the battle for broadband Internet dominance, Comcast Corp. said yesterday it is doubling download speeds for cable modem customers but will keep prices unchanged.
Comcast's move exemplifies a recent trend of cable companies moving to compete with phone companies by boosting services. While phone giants such as Verizon Communications Inc. and SBC Communications Inc. attempt to gain market share by slashing prices, cable companies like Comcast want to avoid engaging in a price war. Cable is trying to justify the premium price for its broadband offerings by cranking up Net access speeds and features.
While growth rates are slowing, more than 500,000 Americans a month have been signing up for broadband this year, choosing cable over DSL by a generally 2-1 ratio.
This week, SBC slashed its broadband Net subscription fee to as low as $27. RCN Corp., which competes with Comcast in some parts of Boston, Philadelphia, and other markets, unveiled plans to offer higher broadband speeds for the same price starting Oct. 15.
Comcast said its more than 450,000 broadband Net customers in New England are likely to be able to get the new 3 megabit-per-second service before the end of the year. The process requires nothing more than unplugging and reconnecting the modem after Comcast has completed the necessary network upgrades. It is beginning the upgrade today in Atlanta, Detroit, Pittsburgh, and other markets and will extend it to most of its US service territory by year's end.
The service will continue to cost $43 a month if subscribers also take cable television, or $58 for cable modem only. Comcast is only claiming downloads of "up to" 3 megabits, not consistent service at that rate. It is leaving the upstream speed for transmitting material to the Net unchanged at 256 kilobits per second. The 3 megabit service will download websites, music, video clips, and other Net content at speeds 70 to 100 times faster than a conventional dial-up modem and twice as fast as Verizon's standard digital subscriber line service.
"Comcast's strategy is to provide our broadband customers with more value, features and a speed to support the evolving Internet," said David Juliano, Comcast senior vice president and general manager of its online division. "The doubling of downstream speed is a significant step in offering customers a superior high-speed Internet experience while preparing our network and service offerings for long-term business growth."
Philadelphia-based Comcast ranks as the nation's largest broadband provider with about 4.4 million subscribers nationally, followed by Time Warner with 2.9 million, SBC with over 2.7 million, Verizon with 1.9 million, and Cox Cable with 1.7 million.
At the same time it slashed DSL prices to as low as $30 a month this year, Verizon also more than doubled the standard download speed to match cable's 1.5 megabit rate. But Verizon spokeswoman Bobbi Henson said yesterday the phone giant was not fazed by Comcast's speed boost, saying it will have little value for the average Net surfer.
"We believe that for the majority of users, a maximum speed of 1.5 megabits is a terrific speed," Henson said. "We think people now are driven more by price than by needing 3 megabits of speed."
In Canada, Rogers Cable has pioneered a lower-priced, slower-speed version of its cable modem service. But Comcast said its only plans for new tiers of service involve faster, more richly featured plans that include features such as wireless home networks. Many industry analysts think US cable companies are scared of considering "broadband lite" offerings because many current customers who find 1.5 megabits more than fast enough for e-mail and Web surfing would be happy to switch to cheaper services that remain several times faster than dial-up modems -- but generate much less profit for cable companies. Bruce Leichtman, principal analyst with Leichtman Research Group, a Durham, N.H., firm that follows the broadband and cable markets, said of the Comcast move, "I think as much as anything, it gives them a bullet point in their marketing materials. It's a reason to get people to keep paying that price instead of skipping down to a lower-priced service."
RCN, which serves parts of Boston and 14 suburbs, said it will upgrade current 1.5 megabit customers to 3 megabits on Oct. 15 and crank up speeds for customers who have bought a premium 3 megabit service to 5 megabits.
Peter J. Howe can be reached at firstname.lastname@example.org.
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