Frontier Communications Northwest, Inc., has won an end to rate regulation, arguing sufficient competition exists between telecom companies in Washington State to make the oversight unnecessary.

The Washington State Utilities and Transportation Commission approved the request this week, adding it would allow more pricing flexibility for Frontier services in the state.

Although the majority of Washington is served by CenturyLink, which acquired the assets of Qwest, Frontier has 321,000 customers in Redmond, Kirkland, Everett, Bothell, Woodinville, and other smaller communities. Most of Frontier’s customers were acquired from Verizon Northwest in 2010 after the company exited the landline business in the state.

Frontier must still adhere to Washington’s consumer protection laws. Customers with unresolved problems with Frontier services, including its adopted FiOS fiber network, can call the Commission’s HelpLine at 1-888-333-9882.

Verizon is “redefining the power of the Internet” in select FiOS areas with the introduction of a new 500/100Mbps speed tier that blows away Time Warner Cable and leaves Cablevision and other competitors woefully behind.

Just weeks after Cablevision boosted upload speeds, Verizon has responded with service offerings up to a half gigabit in speed, telling customers FiOS Quantum 150/65Mbps, 300/65Mbps, and 500/100Mbps plans will “radically change everything you do online right now – and in the future.” It is ten times faster than the fastest service available from Time Warner Cable in the northeast: 50/5Mbps.

Verizon’s fastest broadband does not come cheap, however. The 500Mbps package starts at $294.99 a month for new customers with a two-year contract. Verizon Voice service is required to get the promotional price and a $165 early termination fee applies (reduced by $7.50 for each month a customer maintains service). A $59.99 activation and other fees, taxes, charges, and terms apply. Customers must also pass a credit check to avoid a deposit. Skip the contract and other requirements and the rate is only slightly more: $304.99 a month.

Verizon is charging nearly four times more than what Google charges for its twice as fast gigabit service. But analysts believe that Google will never venture into Verizon FiOS territory so price competition is unlikely in the near term. Cable operators that compete with Verizon would have to dedicate a considerable amount of bandwidth to best Verizon’s download speeds, and matching upstream speeds will be even more problematic unless and until cable operators transition their systems to all digital video to free up bandwidth.

But Verizon’s fastest Internet speeds are not available in all FiOS areas. The company warns “500/100Mbps service availability may be limited in your area based on network qualification requirements.”

Verizon’s competitors, which don’t have the benefit of an all-fiber network, continue to stress consumers simply don’t need any speeds faster than what they now offer. Frontier Communications believes most consumers do just fine with 6Mbps DSL. Verizon’s larger cable competitors range from Time Warner Cable, which does not even try to match its competitor’s fiber speeds, to Bright House, which competes with Verizon FiOS in Florida, to Comcast, which offers faster Internet service but regularly threatens to cap how much customers can use each month. Verizon FiOS has, in practical terms, no usage caps.

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access. The issue with such speed is really more about demand than supply. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available.” — David Cohen, chief lobbyist, Comcast Corp., May 2013

“Residential customers, at this time, do not need the bandwidth offered with dedicated fiber – however, Bright House has led the industry in comprehensively deploying next-generation bandwidth services (DOCSIS 3.0) to its entire footprint in Florida – current speeds offered are 50Mbps with the ability to offer much higher. We provision our network according to our customers’ needs.” – Don Forbes, Bright House Networks, February 2011

[flv width=”640″ height=”380″]http://www.phillipdampier.com/video/Verizon FiOS Introduces 500Mbps 7-22-13.mp4[/flv]

Verizon FiOS introduces faster broadband speeds to help customers accomplish more of what they want to do online. Verizon’s Fowler Abercrombie says ‘it’s only the beginning’ as Verizon continues to innovate on its fiber to the home network. (2 minutes)

Comcast has been a part of life in Muskegon, Mich. for decades, thanks in part to an unusually long 25-year franchise agreement signed when President Reagan was serving his last year in office. In 1988, the Berlin Wall was still in place, Mikhail Gorbachev formally implemented glasnost and perestroika, Snapple appeared on store shelves nationwide, and compact discs finally outsold vinyl records for the first time.

All good things must come to an end and Comcast’s contract to serve will finally expire Aug. 2. City officials want residents to understand that after two plus decades, it is appropriate to take some time to consider all the options. But a 2007 law has cut that time of reflection down to a month, and removed most of the powers Michigan communities used to have to select the best cable operator for their community. It’s a fact of life Comcast is well aware of, and it underlined that point by tossing a carelessly written, pro forma/fait accompli franchise renewal proposal into the mail that left Muskegon’s civic leaders cold. But if they fail to act fast, Comcast will win automatic approval of whatever it proposes to offer the 38,000 residents of the western Michigan city for years to come.

Statewide Video Franchising in Michigan

In December 2006, primarily at the behest of AT&T, the Michigan legislature passed a new statute that would create a uniform, statewide video franchise agreement template that providers could use to apply for or renew their franchises to operate. In theory, establishing a uniform, simplified franchise application would lead AT&T to quickly wire Michigan with U-verse, its competing cable/broadband/phone service, and bring dramatically lower prices for cable service and fewer complaints because of greater competition.

The Uniform Video Services Local Franchise Act was remarkably similar to those passed in more than a dozen other states — no mistake considering it was based largely on an AT&T-written draft distributed and promoted by the American Legislative Exchange Council (ALEC), an AT&T-backed third-party group that encourages state legislatures to enact corporate-ghostwritten bills into law.

Under the new law, much of the power reserved by local officials to approve cable franchises and enforce good customer service was stripped away and handed to the state’s Public Service Commission. The deregulation measure tipped the balance of power in providers’ favor, making it possible to do business on their terms, not those sought by community leaders. Among the law’s provisions:

1. Communities are still bound by the terms of their existing franchise agreements, but providers can break the legacy contracts for any reason, forcing a new agreement under the new statewide franchise law. If a provider wants out, they can abandon the community or transfer operations to a new provider with 15 days advance notice and no prior approval.
2. A franchise renewal proposal will be automatically approved if a city does not reject it within 30 days.
3. Communities cannot unreasonably restrict providers from access to public rights-of-way, an important consideration for AT&T’s U-verse, which requires the placement of large, sometimes noisy utility cabinets (a/k/a “lawn refrigerators”) to connect its fiber network with residential copper wiring.
4. Communities are limited to collecting up to 5% of video revenue in franchise fees and up to 2% to support Public, Educational, and Government (PEG) channels. In the past, some communities asked cable operators to wire schools, libraries, and local government offices at no cost, and several negotiated other forms of support for PEG channels, which allow local citizens to view town board meetings and create and distribute locally produced programming. Today, those agreements are only possible on a voluntary basis, without any threat if a provider refuses, they will get their franchise request rejected.
5. Providers are no longer obligated to honor agreements setting timetables to wire communities. Instead, they can handpick areas to be served, except in cases where racial or income discrimination can be proven.

Since the law was clearly designed to help new entrants like AT&T’s U-verse and Verizon FiOS, Michigan’s incumbent cable companies either demanded the same rights, remained neutral, or halfheartedly protested the proposed law suggesting it unfairly benefited new competitors. Cable companies, for example, would not benefit from laws throwing out buildout requirements because their networks are already largely complete.

But once signed into law, cable operators did begin asking cities to voluntarily adopt the new uniform statewide video franchise. Muskegon joined most other Michigan cities in declining the invitation.

AT&T did begin wiring Michigan for U-verse service, although there is no evidence it would not have done so had the Act never been signed into law. But that has not helped Muskegon, because the dominant phone company in the area is Frontier Communications. Frontier has so far shown no interest in building a competing cable TV service, so the only competition residents get are from two satellite companies.

City of Detroit v. State of Michigan and Comcast

Soon after the statewide franchise law was passed, Comcast notified the city of Detroit it could take the proposed renewal of its existing 1985 franchise agreement and go pound salt. The franchise agreement with the city expired in February 2007, just a month after the new law took effect. It was a new day, Comcast told city officials, and the company offered its own proposal for renewal — a 5% take-it-or-leave-it franchise fee and nothing else. Comcast even rejected the city’s counteroffer to include a 2% PEG fee, permitted under the new law.

Franchise negotiations went nowhere, but Comcast had nothing to fear. The city did not properly reject their franchise renewal offer so, as far as the company was concerned, it automatically won a franchise renewal.

The city sued both Comcast and the State of Michigan in the summer of 2010 alleging the statewide law violated the federal Cable Act, usurped local “home rule” authority, and that Comcast was illegally trespassing in the city without a franchise agreement. The Michigan Attorney General took Comcast’s side, defended the state law, and helped the cable company argue its case in court.

Comcast did not want the case heard and asked for its immediate dismissal, which was rejected.

In the summer of 2012, the judge split the decision between the city and Comcast. The judge found that Comcast had probably been operating illegally in Detroit since 2007 and owes the city damages. The judge also found parts of the state law troubling enough to invalidate. In particular, he emphasized cities do have a clear right to reject franchise proposals offered by cable operators and that in many cases those operators must adhere to their existing franchise agreements until they expire. Cities also have the right to protect and manage their rights-of-way, ending the perception cable and phone companies have the right to place hardware almost at-will in public areas.

Comcast wants to avoid paying Detroit damages for potentially operating illegally without a valid franchise.

The judge found nothing inherently faulty with the concept of statewide video franchising, nor did he rule that providers are required to serve everyone in a geographic area or that cities are allowed to enforce local customer service standards.

The impact of the statewide law, even after the judge’s ruling, still erodes local control. As pre-2007 franchise agreements expire, it is highly unlikely cable operators will continue to offer free service to municipal buildings, will not accept requirements to provide “universal service” or even language requiring wiring of every home that meets a “homes per mile” test. Some cable operators are even closing local customer service centers that used to be required in many franchise agreements.

Comcast did not appreciate the court ruling, sought to have it set aside, and failed. Now the Court of Appeals will likely weigh in on the case by the end of this year. Comcast is particularly concerned about the prospect of paying damages to the city of Detroit for illegally operating without a valid franchise. The judge hearing the case considered that a very real possibility and requested submissions from all parties about how much Comcast should pay the city.

Muskegon officials cited the judge’s rulings in the Detroit case in their letter rejecting Comcast’s proposed renewal agreement. The city wants to renegotiate certain terms regarding its PEG channels, still wants complimentary service to public buildings, and requests cable service be extended to the Hartshorn Marina.

Six Years Later, Cable Rates and Complaints Still Rising, the Competition is Fleeting, and Many Believe the Law Has Achieved Nothing

The Michigan Public Service Commission is tasked with reporting annually to the legislature and the public about the impact of the AT&T-sponsored law. The PSC’s broad conclusion is that the new law is working:

Increases in subscribers as well as the emergence of another video/cable provider are positive signs for the video services industry in the state of Michigan. Both franchise entities and providers have continued to report that video/cable competition is continuing to grow. Growth in competition has been observed each year since the Commission began issuing this report. In addition to the increase in competitive providers, companies continued to invest hundreds of millions of dollars into the Michigan video/cable market in 2012.

As the Act enters its seventh year of existence, signs of progress and competition continue to be evident. It appears that both franchise entities and providers perceive that providers are offering more services to customers. In addition, more areas throughout Michigan are beginning to have a choice of video/cable service providers.

But in the same report, the PSC admits the overwhelming consensus among those in individual communities is the law has made little to no difference in competition or pricing. For example, every provider has continued to raise their rates, particularly after promotional new customer packages expire. Much of the savings calculated in Michigan took introductory prices into account, such as when AT&T U-verse entered a market. After 1-2 years, those savings evaporate. AT&T has increased its pricing just as often as dominant cable providers Comcast and Charter.

The PSC touts that 15 new competitors have begun offering service in Michigan since the law was enacted. But besides AT&T’s U-verse., the majority of those new entrants are municipal telephone companies, small/family owned rural cable companies, or providers that specialize in serving only apartment complexes or condos. All but AT&T serve only tiny areas in Michigan and most have customers that number only in the hundreds to low-thousands.

Michigan’s New Competitors

• Ace Telephone Company of Michigan Inc.
• AT&T (U-verse)
• Bloomingdale Communications, Inc.
• Drenthe Telephone
• Martell Cable Service Inc.
• Mediagate Digital
• Michigan Cable Partners (MICOM Cable)
• Packerland Broadband
• Sister Lakes Cable TV
• Southwest Michigan Communications Inc.
• Spectrum Broadband
• Summit Digital
• Sunrise Communications LLC
• Vogtmann Engineering
• Waldron Communication Company

How many new Michigan customers has this competition netted since 2011? 2,116

The overwhelming majority of Michigan communities still have just one cable operator and no competitor. AT&T U-verse accounts for almost all the communities reporting a second provider.

Complaints have also been higher every year the statewide franchise law has been in effect. In 2007, there were 615 formal complaints made to the PSC. Every year thereafter, the number of complaints exceed 2007 levels, ranging from 757 in 2011 to 1,074 in 2010. Comcast is by far the worst offender — 51 percent. AT&T and Charter had a smaller percentage of complaints, 15 and 14 percent respectively. The majority of complaints among all providers deal with billing issues.

Since the new law took effect, many communities have felt so disempowered, they stopped reporting local complaints to the PSC. But among those who have, the story is the same in states without statewide franchise laws:

• System updates not completed as promised. Large numbers (of residents) have gone to satellite;
• Upgrades needed to allow for better reception and channel selection;
• There are two providers in our area, yet little increase in competition;
• Cost to extend service to reach potential customers affects competition;
• Cable provider left when switching from analog to digital, stating not enough customers to afford the changeover. Now only satellite is available;
• No broadband/high-speed Internet service in many townships;
• No phone, cable service available;
• Michigan has totally failed bringing affordable Internet service to this community, and has prevented our township government from providing the needed services.

The perceived impact of the 2007 law isn’t so great either:

• Communities lost in-kind and other services from the incumbent provider;
• Cable rates continue to increase;
• Zero value added and has eroded local control of franchising;
• Customers have a choice now, but rates are still higher;
• Providers simply poach competitor’s customers as evidenced by flat franchise revenue; as one increases the other decreases;
• This statute has proven to accomplish literally nothing for municipalities and only serves to benefit providers;
• The Act did nothing to improve service.

Wisconsin Republicans are outraged AT&T and CenturyLink are not able to charge taxpayers and students more than double the price for broadband in schools and libraries.

Wisconsin taxpayers and students could face substantially higher taxes and tuition fees because Republicans prefer AT&T and other commercial Internet Service Providers deliver high-speed Internet access to schools and libraries, even if prices are more than double those charged by the existing non-profit, cooperative provider.

Last week, under growing pressure and criticism from Republican legislators and the potential threat of private litigation, the University of Wisconsin withdrew its contract with WiscNet, fearing a costly backlash that could interrupt the school’s educational and research missions.

Republicans in the state legislature forced a competition ban in the 2011-2013 budget directly targeting WiscNet, an institutional broadband provider serving 300 public schools, state agencies, and 15 of 17 Wisconsin library systems. They consider WiscNet a direct competitive threat to the business interests of AT&T and other telecommunications companies.

The loss of business from UW has raised questions about the ongoing viability of WiscNet’s operations, and has encouraged critics to continue the campaign against public broadband.

“Isn’t it a sad day when political pressures from telephone company lobbyists keep us from working together,” asked WiscNet Wire. “It’s frustrating, yet fascinating.”

Many of WiscNet’s members report that “going private” for Internet connectivity will more than double their costs. This was confirmed by Wisconsin’s Legislative Audit Bureau, which reported a member paying WiscNet $500 month for Internet service would face bills of $1,100 or more if provided by AT&T or other telecom companies.

Republicans have complained WiscNet’s close ties to the state university system and its efforts to resist the Walker Administration’s efforts to dismantle the institutional fiber network’s current operational plans border on unethical.

Cheerleading the Republicans are providers including AT&T and CenturyLink, both filing their own respective complaints (AT&T) (CenturyLink). Joining them is the Wisconsin State Telecom Association (WSTA), which represents Wisconsin’s independent rural phone companies like Frontier Communications.

William Esbeck, WSTA’s executive director, has been on WiscNet’s case for years. He said WiscNet’s recent victory in a procurement process to supply Internet service across the UW system was proof the bidding was rigged.

“The UW simply created a ‘request for proposals’ that matched what WiscNet was already doing,” said Esbeck.

Republican legislators joined Esbeck threatening hearings and unspecified repercussions for the “civil disobedience” on display by university officials attempting an end run around the Walker Administration.

“There have been repeated, flagrant violations of state law — intentional deception at a level that I just am flabbergasted by, even today — and no accountability for it whatsoever,” said state Rep. Dean Knudson (R-Hudson), at a recent budget committee hearing. Among Knudson’s biggest campaign contributors: the WSTA and CenturyLink.

In a May 23 letter sent to UW System president Kevin Reilly, state Sen. Paul Farrow (R-Pewaukee) accused UW officials of “mismanagement and unethical behavior,” saying they’d shown disdain for the legislature and contempt for the laws and directives it passed, reported Bill Lueders, the Money and Politics Project director at the Wisconsin Center for Investigative Journalism.

Among Farrow’s biggest campaign donors: TDS Telecom and the WSTA.

Both Farrow and Knudson are also known members of the American Legislative Exchange Council (ALEC), a corporate financed group that produces anti-public broadband draft legislation for introduction by the group’s members. Both CenturyLink and AT&T are sponsors of ALEC, AT&T in particular.

The Walker Administration has given the UW System an extra six months to sever all ties with WiscNet.

“We just don’t see the need of delivering [gigabit broadband] to consumers.” — Irene Esteves, former chief financial officer, Time Warner Cable, February 2013

“For some, the discussion about the broadband Internet seems to begin and end on the issue of ‘gigabit’ access. The issue with such speed is really more about demand than supply. Most websites can’t deliver content as fast as current networks move, and most U.S. homes have routers that can’t support the speed already available.” — David Cohen, chief lobbyist, Comcast Corp., May 2013

“We don’t focus on megabits, we don’t focus on gigabits, we focus on activities. We go to the activity set to get a sense of what customers are actually doing and the majority of our customers fit into that 6Mbps or less category.” — Maggie Wilderotter, CEO, Frontier Communications, May 2013

“It would cost multiple billions” to upgrade Cox’s network to offer gigabit speeds to all its customers. — Pat Esser, CEO, Cox Communications, Pat Esser, chief executive of Cox Communications Inc., January 2013

“The problem with [matching Google Fiber speeds] is even if you build the last mile access plant to [offer gigabit speeds], there is neither the applications that require that nor a broader Internet backbone and servers delivering at that speed. It ends up being more about publicity and bragging. There has been a whole series of articles in the paper about ‘I’m a little startup business and boy it is really great I can get this’ and my reaction is we already have plant there that can deliver whatever it is they are talking about in those articles, which is usually not stuff that requires that high-speed.” — Glenn Britt, CEO, Time Warner Cable, December 2012

“Residential customers, at this time, do not need the bandwidth offered with dedicated fiber – however, Bright House has led the industry in comprehensively deploying next-generation bandwidth services (DOCSIS 3.0) to its entire footprint in Florida – current speeds offered are 50Mbps with the ability to offer much higher. We provision our network according to our customers’ needs.” – Don Forbes, Bright House Networks, February 2011

‘Charter [Cable] is not seeing enough demand to warrant extending fiber to small and medium-sized businesses — and certainly not to every household.’ — “Speedier Internet Rivals Push Past Cable“, New York Times, Jan. 2, 2013

Unless you live in Kansas City, Austin, in a community where public broadband exists, or where Verizon FiOS provides its fiber optic service, chances are your broadband speeds are not growing much, but are getting more expensive. The only thing innovative coming from the local phone or cable company is a constant effort to convince customers they don’t need faster Internet access anyway.

At least until a competitor threatens to shake up the comfortable status quo.

Time Warner Cable claims they are perfectly comfortable offering residential customers no better than 50/5Mbps, except in markets like Kansas City (and soon in Texas) where 100Mbps is more satisfying. Why is a glass Time Warner claims is full to the brim everywhere else in the country only half-full in Kansas City? Google Fiber might be the answer. It offers 1,000/1,000Mbps service for less money than Time Warner used to charge for 50Mbps service, and Google is also headed to Austin.

AT&T scoffed at following Verizon into the world of fiber optic broadband, where broadband speeds are limited only by the possibilities. Instead, they built their half-fiber, half-Alexander Graham Bell-era copper wire hybrid network on the cheap and ended up with broadband speeds topping out around 24Mbps, at least in a perfect AT&T world, assuming everything was ideal between your home and their central office.

At the time U-verse was first breaking ground, cable broadband’s “good enough for you” top Internet speed was typically 10-20Mbps. Now that incrementally faster cable Internet speeds are available from recent DOCSIS 3.0 cable upgrades, AT&T is coming back with an incremental upgrade of its own, to deliver around 75Mbps.

It is still slower than cable, but AT&T thinks it is fast enough for their customers, except in Austin, where Google Fiber provoked the company to claim it would build its own 1,000Mbps fiber network to compete (if it got everything on its Christmas Wish List from federal, state, and local governments).

Are you starting to see a trend here? Competition can turn providers’ investment frowns upside down and get customers faster Internet access.

Wilderotter: Most of our customers are satisfied with 6Mbps broadband.

In rural markets were Frontier Communications faces far less competition from well-heeled cable companies, the company can claim it doesn’t believe most of its customers need north of 6Mbps to do important things on the Internet. If they did, where would they go to do them?

Where Comcast and AT&T directly compete, major Internet speed increases are a matter of “why bother – who needs them.” Comcast is more generous where it faces down Verizon FiOS. AT&T also knows the clock is ticking where Google Fiber is coming to town.

Verizon FiOS, Google Fiber, and a number of community-owned fiber to the home broadband networks like EPB in Chattanooga and Greenlight in Wilson, N.C. seem more interested in boosting speeds to build market share, increase revenue to cover their expenses, and make a marketing point their networks are superior. They respond to requests for speed upgrades differently — “why not?”

Verizon figured out offering 50/25Mbps service was simple to offer and easy to embrace. Two clicks on a FiOS remote control and $10 more a month gets a major speed upgrade for basic Internet customers that used to get 15/5Mbps service. Verizon management reports they are pleased with the number of customers signing up.

In Chattanooga, Tenn. EPB Fiber offered gigabit Internet service because, in the words of its managing director, “it could.” The community-owned utility did not even know how to price residential gigabit service when it first went on offer, but the costs to EPB to offer those speeds are considerably lower over fiber to the home broadband infrastructure.

Broadband customers in Chattanooga, Kansas City and Austin are not too different from customers in Knoxville, Des Moines, and Houston. But the available broadband speeds in those cities sure are.

LUS Fiber in Lafayette, La. changed the song Cox was singing about their ‘adequate’ broadband speeds. Earlier this year, Cox unveiled up to 150/25Mbps service to cut the number of departing customers headed to the community owned utility, already offering those speeds.

Convincing Wall Street that spending money to upgrade networks to next generation technology will earn more money in the long run has failed miserably as a strategy.

“Competitors have been overbuilding, investors are wondering where the returns are,” said Mark Ansboury, president and co-founder of GigaBit Squared. “What you’re seeing is an entrenchment, companies leveraging what they already have in play.”

With North American broadband prices rising, and some cable companies earning 90-95% margins selling broadband, one might think there is plenty of money available to spend on broadband upgrades. Instead, investors are receiving increased dividend payouts, executive compensation packages are swelling as a reward for maximizing shareholder value, and many companies are buying back their stock, refinancing or paying off debt instead of pouring money into major network upgrades.

That is not true in Europe, where providers are making headlines with major network improvements and speed increases, all while charging much less than what North Americans pay for broadband service.

UPC Netherlands is Holland’s second biggest cable company and is in the middle of a broadband speed war with fiber to the home providers.

In the Netherlands, the very concept of Google Fiber’s affordable gigabit speeds terrify cable operators like UPC Netherlands, especially when existing fiber to the home providers in the country are taking Google’s cue and advertising gigabit service themselves. UPC rushed to dedicate up to 16 bonded cable channels to boost cable broadband speeds to 500Mbps in recent field trials, without giving any serious thought to the cable operators in the United States that argue customers don’t need or want the faster Internet speeds fiber offers.

“We had to address it head on very recently because of the fiber (competition)” said vice president of technology Bill Warga. “The company is called Reggefiber in the Netherlands. What they’re touting is a 1Gbps service, [the same speed] upstream and downstream. We came out with 500Mbps service. We had to build a special modem because (DOCSIS) 3.1 chips aren’t out yet. We had to double up on the chips in the modem and put it out there because we had to have a competing product, if anything just in the press. That was a reaction but that tells you how quickly in a marketplace that something can move.”

Despite that, groupthink among cable industry attendees back home at the SCTE Rocky Mountain Chapter Symposium agreed that Google Fiber was a political and marketing stunt, “since the majority of users don’t need those types of speed.”

Who does need and want 500Mbps? Executives at UPC, who have it installed in their homes, admits Warga. But cost can also impact consumer demand. Currently, the most popular legacy UPC broadband package offers 25Mbps for €25 ($32.50). The company now sells 60/6Mbps for €52,50 ($48.75), 100/10Mbps for €42,50 ($55.25) or 150-200/10Mbps for €52,50 ($68.25).

Warga also admits the competition has put UPC in a speed race, and boosted speeds are coming fast and furious.

“They’ll come in and say they’re 100, or 101Mbps we’ll come back and say we’re 110 or 120, or 130Mbps,” Warga said. “It’s a bit of a cat and mouse game, but we always feel like we can be ahead. For us DOCSIS 3.1 can’t come soon enough.”

[flv width=”640″ height=”367”]http://www.phillipdampier.com/video/WSJ Cable Broadband Speeds 1-13.flv[/flv]

The Wall Street Journal investigates why cable companies are getting stingy with broadband speed upgrades while gigabit fiber networks are springing up around the country. (4 minutes)