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Time Warner Cable, Verizon Insist You Don’t Want or Need Gigabit Broadband

Phillip Dampier February 28, 2013 Broadband Speed, Competition, Google Fiber & Wireless, TWC (see Charter), Verizon 6 Comments

timewarner twcBoth Time Warner Cable and Verizon don’t think you want or need gigabit fiber broadband — the kind of service now available in Kansas City from Google Fiber.

Time Warner Cable’s chief financial officer Irene Esteves says the cable company is content delivering most of the country no more than 50/5Mbps broadband (for at least $10 more than Google charges for 1,000/1,000Mbps service).

“We’re in the business of delivering what consumers want, and to stay a little ahead of what we think they will want,” she told an audience of Wall Street investors at the Morgan Stanley Technology Conference. “We just don’t see the need of delivering [gigabit speeds] to consumers.”

Esteves says she is not opposed to supplying gigabit speeds to business customers.

New Yorkers who want fiber optic broadband will need to buy it from Verizon on their FiOS network.

“We’re already delivering 1-10Gbps service to our business customers, so we certainly have the capability of doing it,” she said.

Despite regular quarterly conference calls where Time Warner executives trumpet the growing interest in higher broadband speeds, Esteves downplayed the importance of Time Warner’s top-tier: 50/5Mbps, claiming only a very small fraction of Time Warner customers opt to receive speeds that high.

Fran Shammo, chief financial officer at Verizon agreed with Esteves during the conference, also arguing nobody needs gigabit speeds today.

“FiOS brings a very different perspective to the household with fiber to the home,” Shammo said. “We actually tested a 1Gbps circuit in New York three years ago, so our FiOS product can deliver that but we just don’t see the need yet from a household to have that much of a pipe into their home.”

Time Warner’s “low interest” 50Mbps premium tier is Verizon FiOS’ mainstream sweet spot. Verizon now heavily markets 50/25Mbps Quantum service as their best value option, charging $10 more per month to upgrade from basic 15/5Mbps service.

Currently there are 6 comments on this Article:

  1. elfonblog says:

    Ohhhh Iree-ee-eene, how about an independent survey of what customers want? “Time Warner doesn’t see the need for an independent survey. Our customers don’t want a survey.” haw haw.

  2. Larry says:

    “Our customers aren’t buying the extremely overpriced tiers of service we do offer, so we don’t think our customers want a higher tier of service we’ll charge outrageously for. We think that translates into customers not wanting faster speeds, and definitely not that customers want better pricing. Unless that better pricing means ridiculously low data caps that we can then ping you with lots of extra $10 service fees when you go over, while only offering $5 less a month on the base rate. Because, we feel consumers really want that kind of better pricing.”

    — What the TW execs gave the PR person to translate into “media friendly” terms.

    • There you go. The only thing stopping me from 50/5Mbps service is the price. I remember when Turbo was I think $20-30 more than standard service and it was simply not worth the bang for the buck. When it was repriced at $10 more than standard, it was a no-brainer upgrade.

      I think as soon as customers begin to use applications that require more bandwidth (or TWC slaps a cap on), the only thing that would keep Kansas City customers from saying goodbye to TWC would be a slashing of the price on some retention deal.

      TWC may soon learn what the telcos have been learning for the last three years. When you lose the speed race, customers flock to the provider that can deliver. That is why TWC is picking up dead-end DSL customers from the telcos today and why they could lose them to Google tomorrow.

  3. HB says:

    The main reason I will not upgrade from 30/5 to 50/5 is the upstream is the same. If they made it 50/50 then I might entertain the thought.

  4. Richard says:

    I don’t disagree. If they made the upstream speeds for turbo, and the speed teers above it symmetric, it would be more worth what they charge. But since they won’t thank you lack of viable competition such as google ftth, the speed to price ratio isn’t worth the upgrade in my area at least. So for now i’ll stick with turbo which really should be 20 20 not 20 2.

  5. Heywood says:

    Time Warner logic: Because most cross-country travellers have shown scant interest in our Premium Luxury Bus Services, we can reasonably predict that airplanes are not a viable technology.

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