Broadband service providers battle customer expectations, regulatory uncertainty, says ACG

In its report on the video infrastructure market's third quarter of 2014, ACG Research notes that hesitancy because of regulatory uncertainty cancelled the increase in gigabit broadband access network deployments to leave the market flat.

In its report on the video infrastructure market's third quarter of 2014, ACG Research notes that hesitancy because of regulatory uncertainty cancelled the increase in gigabit broadband access network deployments to leave the market flat.

Overall, broadband access network initiatives, including fiber to the home (FTTH), continue to benefit service providers. At the U.S. Tier 1 level, AT&T U-verse has created a $15 billion annualized revenue stream that is growing at nearly 24%, Verizon's FiOS revenues increased 13% year-over-year in 3Q14, and Comcast can boast 21.6 million high-speed Internet customers, increasing by 315,000, the market research firm notes.

However, service providers find themselves pulled in different directions. "Service providers have a finite amount of capex," said Greg Whelan, principal analyst and consultant at ACG Research. "Demand for higher speeds and ubiquitous coverage conflict with regulatory uncertainty."

On the one hand, service providers must deal with an increasingly restless customer base. "Communities across America are tired of waiting for high-speed broadband," Whelan asserted. "Every city knows the real economic and social benefits of broadband and is fed up waiting for it."

However, concerns about upcoming net neutrality policies from the Federal Communications Commission (FCC) and the ongoing controversy surrounding paid-for fast lanes have caused at least some carriers to slow their broadband network spending (see "AT&T to FCC: You've got our FTTH plans all wrong"), ACG Research notes.

While this uncertainty clouds how and when network operators will reach their customers with high-speed infrastructures, service providers have begun to focus on improving customer experience. Wi-Fi capabilities are important elements here, says ACG, as operators seek to make in-home experience more like the mobile experience by adding seamless roaming and voice over Wi-Fi.

“As set-tops become virtualized the gateway will become the strategic service delivery and control point in the home, said Whelan. As residential Internet of thing applications get adopted look for the gateway with WiFi to be key to success."

For more information on FTTx equipment and providers, visit the Lightwave Buyer's Guide.

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