Friday, September 30, 2016

"Fiber to Home" Not Setting U.S. Internet Access Speed Agenda

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With the caveat that the U.S. market is somewhat unusual in having robust fixed network competition on a facilities basis, it is hard to deny that cable TV operators now are setting the agenda for Internet speed upgrades.

A few years ago, one might have argued that Google Fiber was setting the agenda. A decade ago, you might have argued that Verizon’s FiOS was setting the bandwidth agenda.

These days, it is multi-gigabit services enabled by DOCSIS 3.1 that will likely set the commercial deployment agenda, given the ubiquity of cable TV networks across the country.

It is hard to tell at this point how important--or when--symmetrical bandwidth will become important for cable operators. At the moment, with some caveats, downstream bandwidth likely remains the key driver of marketplace positioning.

Downstream speed tends to be--with price--the way consumers evaluate offers, and downstream capacity grows at a 50 percent to 60 percent compound annual growth rate.

In the next wave of platform development, it seems likely that dramatic leaps in mobile (perhaps in small cell or fixed applications) will complement and possibly compete with fixed networks, to some extent. The new competition will center on multi-gigabit speeds, at a headline level.

Perhaps the more-important development is that mass-deployed bandwidth in the hundreds of megabits range will be widely available, from fixed and mobile networks.

For many veterans of the telecom industry, the notion that “fiber to the home” no longer sets the speed agenda will be shocking. The importance of physical media periodically shifts, so we might yet see another shift back to fiber access as protocols continue to advance.



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