mag 01

CenturyLink gets gigabit fever … in Omaha

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CenturyLink, the nation’s third-largest telephone company, has decided to get join Google, AT&T and several municipalities and get gigabit fever as well. The company will offer a fiber-to-the-home, gigabit network in Omaha, Neb. beginning next week, with service to reach all of the Omaha CenturyLink subscribers in October.

CenturyLink is upgrading its existing fiber architecture in west Omaha using GPON and will serve homes and businesses. Residential customers can bundle the gigabit speeds with existing video and voice service for $79.95 or subscribe to standalone service for $149.95. CenturyLink competes against Cox Cable in Omaha, which offers a 150 Mbps service.

This is a pilot project for the telco, and will cover its 48,000 customers in Omaha. When I asked CenturyLink why it was upgrading to a gigabit, a spokeswoman emailed the following:

Better broadband = More innovation

As a broadband reporter with a passionate belief that more broadband is better for our society and our ability to innovate, I’m thrilled to see more and more companies testing the waters on speed upgrades.

ftthhomespassedftthhomespassed

When Google launched its roll-out plans to build out a gigabit network in Kansas City, it showed that it was willing to enter a capital-intensive business in order to protect its access to the consumer. At that time, ISPs were implementing caps and making a lot of noise about bandwidth hogs and the cost to upgrade networks for people watching video over the top.

Yet, after Google announced Austin, Texas in April as its second location for Google Fiber, AT&T issued a press release saying it too wanted to use Google’s tactics to lay fiber to the home in Austin. It remains to be seen if AT&T takes those steps, but it’s great to see AT&T considering it. A week after Austin, Google said it purchased the fiber network in Provo, Utah (it apparently cost Google $1) and planned to turn on a gigabit network later this year. In Kansas City, Google charges $70 for gigabit-only service and $120 for a gigabit plus TV.

Municipalities and smaller telcos are also getting in the game. Last Friday I covered Vermont’s telco, VTel, and its existing gigabit network that residents can connect to for $35 a month. In a talk with the CEO of VTel, he told me that the he thinks that gigabit fiber is the only way to bring residents and his business into the future. But his $151 million investment costs were offset by $94 million in government loans and grants.

Meanwhile, Century Link isn’t totally throwing its conservative talking points to the wind. In the release announcing the gigabit construction it added a note of caution:

The company will evaluate its Omaha 1 Gbps offer before determining further deployment of this advanced technology, considering such factors as positive community support, competitive parity in the marketplace and the ability to earn a reasonable return on its investment.

I’m curious about all of those things myself. If a traditional telco can invest in gigabit networks and charge a fair rate for them, then I’ll expect to see them pop up in more places. And not just in places targeted by Google.


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apr 26

Vermont gets a gigabit network. And it only costs residents $35 a month

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The telephone company that provided the copper service that in 1923 allowed Calvin Coolidge to be sworn in as United States President, at Plymouth Notch in Vermont, is trading its storied copper for fiber. VTel, a telephone company providing service to 21 Vermont communities is upgrading its network to an all-fiber, gigabit-capable network.

So far, it’s offering about 500 residents gigabit speeds for $35 a month and plans to cover its 17,500 customers by the middle of 2014. That’s about the same time Google plans to start offering gigabit service to its first Austin residents, and means VTel will be hooking up 200 homes to the network each week. So when we counted gigabit homes earlier this week, Vermont likely supplied a few.

VTel’s transition from POTS (plain old telephone) to photons was made possible in part from the broadband bucks the federal government allocated as part of the American Reinvestment and Recovery Act in 2009. Thanks to ARRA grants totaling $94 million, plus matching grants from the local utility that wanted to use the planned network for smart grid deployments and its own investments, VTel has spent over $150 million building out more than 1,200 miles of fiber.

VTel uses Alcatel 100 gigabit routers at each of its 14 rural central offices serving its GigE customer base

VTel uses Alcatel 100 gigabit routers at each of its 14 rural central offices serving its GigE customer base

VTel also operates a 100 gigabit per second backbone in the North East with peering points in New York City, Boston and Montreal, which supports the network and provides redundancy via alternate routes. Inside the home Vtel has to upgrade the equipment it offers consumers to match the gigabit speeds coming into the house. It purchased Actiontec routers for inside the homes, and now its customers are typically experiencing speeds of 925 Mbps to 950 Mbps.

VTel CEO Michel Guité, told the Wall Street Journal that the growth of Google Fiber helps him get approvals for the federal grants to upgrade the network. From the article:

That comes as Google’s Fiber project, which began in Kansas City and is now extending to cities in Utah and Texas, has raised the profile of gigabit broadband and has captured the fancy of many city governments around the country.
“Google has really given us more encouragement,” Mr. Guité said. Mr. Guité said he was denied federal money for his upgrades the first time he applied, but won it the second time around–after Google had announced plans to build out Fiber.

Most tellingly however, was Guité’s quote to the Journal where he says it remains to be seen if this is a “sustainable model.” Selling broadband access for $35 may be possible if much of your deployment costs were covered by federal grants, especially in a rural area where homes are spread out. Generally the more dense a population, the lower the broadband deployment costs, which generally translates in higher monthly bills for customers. But since customers aren’t sure why they need a gigabit yet, getting too far ahead of demand can mean VTel spends money to upgrade before customers want to pay money for the product.

VTel is scheduling community meetings to educate people about the benefits of having a a gigabit network as part of a drive to get customers to sign up. However, for those that are leery about living so far in the future, VTel still offers customers dial up access for $21.95 a month. Now, that makes for a digital divide.


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apr 25

Time Warner Cable sees the Google Fiber threat and offers Austin free Wi-Fi

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Competition is grand. With Google planning to build out a fiber-to-the-home network in Austin, Texas next year, the local incumbent broadband providers are tweaking their models. AT&T has threatened to build its own fiber to the home, gigabit network provided it gets the same concessions from state and city officials that Google did. And Time Warner Cable? Well, it’s offering Austin subscribers free Wi-Fi.

In a blog post Wednesday evening, Time Warner said that existing customers with its standard cable package or above can log onto a city-wide Wi-Fi network the cable company is building out. Why now? Time Warner cites Google Fiber’s plans as a reason to kick its free Wi-Fi project into gear.

We’ve been rolling out our free WiFi network across our footprint for some time now, as part of our larger strategy to offer significantly more value to our Internet subscribers. Austin was in the game plan for 2013. But Google’s recent announcement encouraged us to deploy our network more aggressively now. As I mentioned a few weeks ago, we’re ready to compete.

While paying $70 for 30 Mbps internet service from Time Warner Cable and now getting free Wi-Fi around town is nice, if Google offers me a deal where I get a gigabit connection for anywhere near the Kansas City price tag of $70, free Wi-Fi isn’t going to stop me. It won’t even make me pause.

Still while, I wait to hear where Google will deploy fiber and how much it will cost, I’ll gladly check out the TWC Wi-Fi network. So far it’s only in a few locations, but the company plans to expand it around town. Customers can sign into the network, called TWC WiFi and use same username/password combo they use sign log into their account. Non subscribers can also pay $2.95 per hour for access. Subscribers also get access to other Wi-Fi networks in cities including New York City; Los Angeles; Chicago; Philadelphia; Atlanta; Baltimore; Boston; Washington, D.C.; San Francisco; Orlando; Kansas City; and Charlotte.

As far as responses to the threat of Google Fiber go, Time Warner’s is immediate and measured, especially when compared to AT&T’s. AT&T — with its fiber-to-the-node connections that currently top out at 24 Mbps — has a lot less than TWC has to offer when it comes to fending Google’s gigabit speeds. And after the 2009 experiment in broadband caps that Time Warner Cable attempted in Austin, it’s nice to have the city singled out for a benefit instead of a punitive pricing plan.


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apr 23

How many people have a gigabit connection? Fewer than you think.

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As Google expands its commitment to bringing fiber-to-the-home gigabit connections to more places, I wondered exactly how many people actually have gigabit connections. So I asked Ookla, the company that operates the Speedtest.net service for its data. Turns out, there’s no real way to calculate who has a gig, but the numbers we do have indicate that not too many people are living in the future when it comes to connectivity.

It turns out that between the first of this year and April 8 (when I got the data from Ookla) roughly one in 10,000 devices in the U.S. are surfing at gigabit speeds and roughly 1 in 5,000 homes worldwide can match them. Ookla runs the popular Speedtest.Net service and got this data from users who tested their connections during that time period.

ooklagigabit
Unfortunately, the data on this is relatively inexact, because the art of measuring a gigabit is complicated. As late as last summer when Google launched the first plans for a fiber to the home buildout in Kansas City, the search giant had to work with Ookla to upgrade the test to even be able to read a gigabit. Even so, some customers with a gigabit might not show up because their Wi-Fi routers or computers can’t achieve those speeds and, thus, throttle them back to a mere 100 Mbps or so.

And the numbers provided by Ookla actually measure customers with speeds of above 800 Mbps, which is what it classifies as a gigabit. In the U.S. only 4,110 people have test results at that speed out of 45,468,731 people who used the Ookla tests. Globally, 34,721 users have speeds that high out of 224,404,945 tests. But, clearly not every broadband user is running Speedtest.net or has the right equipment.

gigabitchart

Ookla also provides data on the number of people whose connection speeds are 300 Mbps or greater. In the U.S. this was about 51,100 devices or about 11 in every ten thousand users. Globally it was 204,315 devices or 9 in every 10,000 users.

For additional data points, we can turn to the Fiber to the Home Council, which said a few weeks ago that 640,000 subscribers are buying connections of 100 Mbps or more across North America. That’s a significant number, although the FTTH Council is measuring capacity that is 10 times less than what a gigabit connection can offer. For reference, the FCC in February noted that the average U.S. subscribed broadband speed is now 15.6 Mbps, representing an average annualized speed increase of about 20 percent. And below is a chart from FCC data at the end of 2011 showing the distribution of broadband speeds at the time.

This chart measures both wireless and wireline speeds as of Dec. 2011.

This chart measures both wireless and wireline speeds as of Dec. 2011.

But it looks like the FTTH Council — as well as Google’s experience in getting 90 percent of the neighborhoods in Kansas City signed up for fiber — can tell us something definitive about gigabit connections: People want them. When fiber-to-the home is offered 44.8 percent of the homes passed take the service. Given that those are generally the most expensive connections, that’s a pretty high take rate.

So it looks like even a few thousand Kansas City, Austin, Texas or Provo, Utah homes connected via Google Fiber will not only significantly change the percentage of gigabit customers in the U.S. but also around the globe. Still, we have to start somewhere.


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