More bandwidth than you can use‾

Arik Hesseldahl
04 Jun 2007

From the moment the first phone-line modems squawked to life, connecting consumers to early Internet service providers two decades ago, there has been a nearly universal quest for more plentiful and speedier data pipes into the home.

Yet even now that those pipes are arriving, the race to provide even bigger ones is intensifying among telecom and cable TV companies, as well as wireless network operators.

In Millis, Mass., freelance writer Michael Fitzgerald recently boosted the speed with which he can reach the Internet by subscribing to Verizon's (VZ) new FiOS broadband service. FiOS delivers a super-fast connection by replacing the old copper phone line to each home with a fiber-optic cable, offering Internet downloads as fast as 30 megabits per second, vs. the 1Mbps to 6Mbps of the typical cable or DSL broadband line. 'I was intrigued by the service when I first heard about it,' says Fitzgerald. While he may not fully exploit his new firepower with any regularity, Fitzgerald is one of about 864,000 FiOS broadband subscribers. 'Over the long term, I think there will be benefits that I can't even begin to imagine yet.'

Competing Modes of Delivery

To deliver FiOS, which Verizon is also using to launch its own cable TV service, the once-stodgy telephone company has embarked on a massive network upgrade that's expected to cost $23 billion between 2004 and 2010. Even then, Verizon expects FiOS to be available to 18 million homes, only a little more than half of its territory.

The FiOS initiative has given Verizon an imposing lead in how much bandwidth it can deliver to U.S. homes, and yet the cable industry won't be going down without a fight. Comcast (CMCSA) CEO Brian Roberts recently demonstrated a new technology called DOCSIS 3.0 (Data Over Cable Service Interface Specification) that promises to give cable modem users speeds as high as 150Mbps. However, there are no plans announced for actual market trials of the new cable technology, let alone deployments. If and when it is implemented, Verizon's ready for the arms race, technologically at least: Its new fiber cables can easily carry hundreds of megabits per second of data, though cost is always an issue.

Comcast's advantage"”one that other cable operators such as Time Warner (TWX) and Cablevision (CVC) would presumably share"”is that they will be able to boost their speeds without laying new cable. This, says Comcast Chief Technology Officer Tony Werner, will give cable operators a cost advantage over Verizon and any other company that decides to pull up its wires: 'We'll be able to launch overnight or area-by-area without any digging.'

Upgrade DéjàVu

But once you have 100Mbps or more available at home, what the heck are you going to do with all that bandwidth‾ For the average consumer, 6Mbps should more than suffice for today's typical needs, whether it's downloading music, watching the occasional video, or even running a home network that lets two or three computers do the same all at once. Does anyone really care whether that song download from iTunes (AAPL) takes 10 seconds or 2 seconds‾

We've been here before. In 1999, there were fewer than 2 million people in the U.S.

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