Friday, April 15, 2011

Comcast Feels The Need For Speed

In Top Gun, one of the classic films of the 1980s, a memorable line continues to be recited today, "I feel the need — the need for speed!". So true in fact as Comcast has raised the speed limit on broadband download. "Comcast's Extreme 105 service, one of the fastest residential broadband offerings in the U.S. with download speeds of up to 105 Megabits per second, is now available to 40 million households or approximately 80% of the operator's footprint." And $105/month is the price when bundled with other services. For over the top consumers, that speed means that movies can download in minutes rather than hours. But the cost savings of cord cutting or cord shaving gets lost when you purchase this "extreme" level of service.

And perhaps that is the point. For cable companies like Comcast, Cablevision, and others that are now concerned about lost revenue from over the top streaming services like Hulu and Netflix, more bandwidth can provide the revenue lost from the cable subscription platform. And likely done with a greater profit margin to boot. As long as consumers need wired broadband to receive content, cable and telco companies will maintain a leadership position.

Still, the concern remains that cable could lose too much revenue from cord cutting and especially cord shaving practices. Customers may not flock to higher speeds and remain comfortable with their current bandwidth speeds. And cable companies should still be concerned that alternative wireless platforms could become sufficient enough to replace wired homes. For cable operators, it is a good first step, and definitely not their last.

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