”Parlor trick.” That’s the assessment of Verizon Communications Inc. when it comes to the just-announced 101mbps broadband offer from Cablevision Systems. Spokesperson Eric Rabe did a little trash talking in the Verizon policy blog Wednesday afternoon, characterizing Cablevision as way late to the 100mbps game.
“Verizon first demonstrated the ability to deliver 100mbps to the home over our FiOS system nearly two years ago,” he wrote. “Now, Cablevision is offering that speed – oh, yeah, 101mbps – over its DOCSIS cable system, it claims, to customers across its footprint in the New York area.”
The competitive roasting leaves out what might be the disruptive story in all of this: Cablevision is offering 100mbps for 100 bucks. Verizon, which does not yet have a commercial 100mbps offer (it’s on deck for this year, reportedly), is in the national market with a 50mbps offer for $140, and $89.95 is "select areas" including all of New York State.
Cablevision can afford to add some price/performance pressure: It has spent a good amount to upgrade its network to DOCSIS 3.0 to support those speeds, but it doesn’t have a whole new build to monetize. Verizon however has a $23 billion investment in FiOS. And that makes pricing pressure an issue for the RBOC.
Rabe did have a few more competitive arguments in the hopper however. He went on to say that while there is little demand for such high speeds, it was still worthwhile to raise the specter of a bandwidth congestion nightmare given the shared nature of the cable plant:
“With today’s technology, you don’t have to break much of a sweat to deliver 100mbps to a few customers. But given the inherent limits of the cable platform, a cluster of bandwidth junkies living near each other could be a real problem. One estimate is that a single 101mbps customer would use some 60 percent of the capacity in a neighborhood. Other users? Outta luck.”
Verizon has always maintained that FiOS, on the other hand, is built on GPON technology, and offers better performance with little of the congestion concerns.