Feature Article

September 03, 2014

'Upgrade or Die' for Gigabit Access?

‘You upgrade or you die' is the catchy sub-title to a new report by GigU on the state of gigabit Internet access in the United States.

As always seems to be the case, reasonable observers might even disagree about fundamental matters of fact, such as whether U.S. prices or access speeds are faster or slower than in other regions and markets.

Some might even doubt that the gigabit access trend is real. The GigU report suggests there has been meaningful progress.

“We have made enormous progress,” the report suggests. “Scores of American communities” are building such networks. Moreover, “in a radical change over the past 12 months, multiple service providers are initiating their own efforts.”

The ‘upgrade or you die’ sub-title explains GigU’s view of competitive dynamics, where Google Fiber and municipal or other public-private testbeds have changed the competitive context.

The report also notes that progress towards gigabit access is not at a point where progress is “inevitable or irreversible.”

“We admit we’re not really sure that it is a case of upgrade or die for every telco or cable company,” the authors say. That likely is correct. In many markets, customers might not wish to buy gigabit services, at current or projected future price levels, compared to offers of 100 Mbps or 300 Mbps at lower price points.

Indeed, that is a current bet many cable companies are making, essentially gambling that, in the near term, the practical difference in end user experience between 100 Mbps or 300 Mbps and 1 Gbps is relatively slight.

But some extrapolation of Internet access speed trends since the days of dial-up access would suggest gigabit access will indeed be quite typical at some point. The issue is when?

By some reasonable deduction, it has been possible to suggest that 100 Mbps would be a typical access speed in the U.S. market by 2020, as crazy as that might have seemed 10 years ago, or even five years ago.

In 2002, only about 10 percent of U.S. households were buying broadband service. A decade later, virtually all Internet-using households were buying broadband access service.

Researchers at Technology Futures continue to suggest that 100 Mbps will be a common access speed for U.S. households by 2020, for example.

The new issue is how common gigabit access will be.

Edited by Maurice Nagle

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