news Giant US telco Verizon has launched a 300Mbps broadband service with unlimited data quota included that uses the same fibre to the home technology as the National Broadband Network, stating that homes with multiple devices using high-bandwidth applications simultaneously need the extra speeds.
The telco has since 2005 been offering up to 150Mbps speeds on its FiOS network, which currently boasts some 3.8 million customers. It stretches across a number of major cities, reaching some 13.7 million homes in total, with the company planning future rollouts to a further 5 million homes. The company has previously offered 12Mbps, 25Mbps, 35Mbps and 150Mbps speed tiers, with upload speeds ranging up to 35Mbps.
However, in a statement issued on Wednesday this week, Verizon said it was responding to “consumer demand” for ultra-high-speed broadband services, and so would offer the new speed tiers.
“The new speeds, to be offered in stand-alone and bundled packages, are designed to address the burgeoning growth of bandwidth-intensive applications and the increase in the number of Internet-connected devices being used simultaneously in the same household,” the telco said. “The speeds will also support consumers who are watching more over-the-top video programming on TVs and portable devices, and accommodate the rise in Internet-enabled applications like video and audio streaming, home monitoring devices, video chat, multiplayer gaming and online backup services, all of which can simultaneously sap the strength of many home broadband connections.”
Bob Mudge, president of Verizon’s consumer and mass market business unit, characterised the broadband speed increases as a “societal and technological necessity,” as secure network applications enable consumers to enjoy a “borderless lifestyle” in which they can connect to the content they care about, anytime and anywhere.
“The ways we used the Internet and watched TV over the past 10 to 15 years have dramatically shifted,” said Mudge. “With the emergence of smartphones, smart TVs, Blu-ray players, tablets and gaming consoles that also serve as over-the-top devices, consumers need more bandwidth to receive the highest-quality experience.”
Verizon said the higher speeds would provide customers with “sustained speed and reliability of service”. In contrast, the company said, rival companies operating HFC cable networks only offered “intermittent speed boosts” as their networks were not completely fibre-optic.
“Our top FiOS speed will be twice as fast as anything America has ever seen,” said Mike Ritter, chief marketing officer for Verizon’s consumer and mass market business unit. “High-speed Internet no longer is just for techies, as more than half of our residential consumers already use at least a 20Mbps Internet connection. Streaming online video on an all-fiber-optic connection providing faster speeds is better and more reliable during peak Internet usage hours.
“As recently as 2005, video was less than 10 percent of Web traffic,” said Ritter. “By the end of this year, we expect it to be 50 percent, growing to 90 percent in just a few years.” Today, the average home has seven Internet-connected devices. With the continuing increase of devices in the home using a wired or Wi-Fi Internet connection, the average home by 2015 will have between nine and 15 Internet-connected devices, said Ritter.
Verizon currently charges its customers between US$74.99 (for its 24Mbps plan) and US$199.99 (for its 150Mbps plan) for its fibre to the home broadband services, and it also has additional bundled packages featuring telephone and video services. It is not as common in the US for telcos to set quota limits on broadband downloads, unlike in Australia, where it is more normal for such limits to be set. NBN Co plans to eventually offer services up to 1Gbps on Australia’s own NBN, but the network is currently limited to 100Mbps.
It’s interesting to see that US telco Verizon, which has many millions of fibre to the home customers, believes both that they’re demanding speeds up to 300Mbps, and also that they’re willing to pay several hundred dollars a month for such broadband speeds.
This kind of thinking — which I think is not too far from the commercial reality in Australia as well — runs directly contra to the kind of limited thinking around the NBN fibre in Australia that dominates so much of the debate. Clearly, there is demand for these kinds of services from a similar customer base in the US, and just as similarly, those customers are willing to pay top dollar. This is something which I think the Australian telecommunications industry needs to pay attention to.
This is not future prognostication. This is a real company, with a similar customer base to the NBN, with exactly the same technology, and with millions of existing and active connections. The similarity to what Australia is planning locally — even down to the comparison with the HFC cable networks — is pretty exact, apart from the fact that Verizon is not an infrastructure monopoly — it has competitors, such as the aforementioned cable networks. And Verizon is thinking about the future — not about how many of its customers merely want to buy basic voice telephony services.
Image credit (table): Verizon