Broadband providers wake up to the need for speed

Slow and expensive. For years, those two words have summed up the broadband internet experience in the US, despite the preeminence of Silicon Valley's tech industry.

Now, the US telecoms industry is awaking from its slumber - prompted, in part, by Google Fiber, a superfast broadband network that is being built from scratch by the search group.

On Thursday, Comcast announced Gigabit Pro, a new residential internet service that offers download and upload speeds of 2 gigabits per second - a blistering pace that most consumers simply do not need. It has been likened to offering a Lamborghini to a parent who only needs a car for the school run.

Nevertheless, the company - the largest US cable provider, with a roughly 57 per cent share of the broadband market - said it wanted to "help customers push the boundaries of what the internet can do" and "inspire developers to think about what's possible in a multi-gigabit future".

It will launch the service in Atlanta next month, before introducing it in other cities throughout the course of the year. Other details, such as pricing, were sketchy. Comcast's fastest service currently costs $399 a month, considerably more than rival offerings, although a source familiar with its plans said Gigabit Pro would be cheaper.

For most customers, though, it is still likely to prove too much speed for too much money.

However, the wider significance of Gigabut Pro is that it presages a broader upgrade of Comcast's network, due to be completed next year. At present, only those who live very near the fibre backbone of Comcast's network will be eligible for the new service. After the upgrade, the company will be able to offer 1 gigabit speeds to almost all of its customers.

Comcast is the latest provider to offer superfast speeds, alongside AT&T and Centurylink - and their efforts can be seen as a victory for Google. Back in 2012, the tech group entered the broadband market by launching a gigabit offering in Kansas City, with the aim of championing a speedier American internet.

It is also a vindication of "nudge" economics. Google says it does not want to become a full-scale telecoms operator, and Google Fiber is available in only three markets, with plans to launch in a few dozen more. But its incursion into the broadband market has pushed the incumbents to up their game.

AT&T has introduced its U-verse Gigapower service in five markets, including Austin, Texas and Kansas City, where Google Fiber also operates, and in Cupertino, California - home to Apple and right on Google's doorstep. It plans to expand to 11 additional markets and is exploring 25 more.

There are also signs that Google is pushing down prices in the markets where it operates. Google Fiber offers gigabit internet for $70 a month - just a few dollars less than the price to get a connection with a third of that speed in New York. <

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In Kansas and Austin, the two areas where AT&T competes directly with Google, it offers a gigabit service for $70 a month. But in markets where Google is absent, such as Cupertino and Dallas-Fort Worth, Texas, it charges $110 - almost 60 per cent more.

AT&T played down suggestions of a Google effect. "We are trialling different prices in different markets," a spokesperson said.

Even so, Jeff Kagan, an independent technology analyst, said the launch of Google Fiber had encouraged AT&T and others to roll out gigabit speeds more quickly than they would have otherwise: "Would these speeds have come along eventually without Google? Probably. But would they have happened as quickly? Probably not. Google wanted everything overnight."

Google is not the only one that will be heartened by the rise of superfast broadband. Tom Wheeler, the chair of the Federal Communication Commission, has been busy defending his decision regulate broadband as if it were a public utility - a proposal that will, according to the industry, have a chilling effect on investment. Increased competition in the superfast broadband market undermines this claim.

In speech in Ohio last week, Mr Wheeler pointed out: "Some internet service providers say investment will suffer if an open Internet is mandated. Google Fiber and hundreds of rural companies . . . say they can build their businesses within the sort of light-touch rules we have adopted. Even Comcast, AT&T and Verizon, who oppose what we did, continue to invest in their networks."

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