Pike & Fischer: Cable broadband speeds on the rise

DECEMBER 18, 2008 -- If your cable broadband service is getting better, you may have telephone company Verizon to thank, says market researcher Pike & Fischer.

DECEMBER 18, 2008 -- If your cable broadband service is getting better, you may have telephone company Verizon to thank, says market researcher Pike & Fischer (search for Pike & Fischer).

According to the company's annual analysis of broadband speeds and prices, cable operators are generally increasing the data rates of their standard high-speed Internet services without raising prices. But Verizon's FiOS service has injected a new level of competition in the residential broadband market, creating a hodge-podge of discounts and other special offers across the country.

"As Verizon has rolled out FiOS Internet and TV services in more and more communities, the market has seen an increasing variety of prices and data rates, as cable operators respond to FiOS launches [and to a lesser extent similar services from AT&T and Qwest Communications] on an increasingly market-by-market basis," explains Pike & Fischer contributing analyst Mitchell Shapiro in the report.

Like prior years, most cable operators today offer a flagship broadband service tier priced in the range of $40 to $45 per month, depending on the region. But standard cable modem speeds have climbed from an average high of 3 Mbps in 2004 to today's typical 10-15 Mbps, and in some markets as much as 30 Mbps. (Higher speeds are available at premium prices.) And cable companies are increasingly using short-term discounts to attract customers.

This has happened as Verizon's FiOS, which operates on a fiber-optic network that provides more capacity than cable systems, has crept into the market with standard prices as much as $10 more than cable. But a key difference between FiOS and cable modem service is the expanded upstream capacity that Verizon's network provides, making it easier for users to upload large files, the report notes.

For more information about the report, "High-speed Internet Packaging and Pricing Strategies: 5th Edition," visit Pike & Fischer

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