Comcast (NASDAQ: CMCSA) has hatched a plan to challenge the growing 1 Gbps broadband trend led by AT&T (NYSE: T) and Google Fiber (NASDAQ: GOOG) with plans to offer a symmetrical 2 Gbps service to 1.5 million customers in Atlanta beginning next month, and ultimately extending the service to a total of 18 million homes by the end of 2015.
The cable MSO's pending move into the Atlanta market with a 2 Gbps product will certainly up the competitive ante in Atlanta, one where AT&T and Google Fiber have cited as a market where they will deliver their 1 Gbps service.
What will be interesting to see about Comcast is how it will price the 2 Gbps service. Today, Google Fiber and AT&T have offered their 1 Gbps service for $70 to $100 a month. However, Comcast has not indicated how it will price the new service.
Interestingly, Google Fiber's presence has been driving AT&T to cut the prices of its standalone 1 Gbps service. In Dallas, AT&T reduced the price to $110 from $120. Likewise, in Winston-Salem and Raleigh-Durham, N.C., AT&T reduced the price of service from $120 a month to $70 last month.
But unlike AT&T, Comcast won't impose any usage caps on its Gigabit Pro service.
"Our approach is to offer the most comprehensive rollout of multi-gigabit service to the most homes as quickly as possible, not just to certain neighborhoods," said Doug Guthrie, SVP of Comcast Cable's South Region, in a release. "We already provide the fastest speeds to the most homes and businesses in Atlanta, and access to Gigabit Pro will give our customers all the broadband capacity they need to stay ahead of future technologies and innovations."
Although Comcast does not plan to build out the network in a neighborhood-by-neighborhood fashion like Google Fiber, the one limitation is that it will initially be available to customers located close to its existing fiber network. Comcast said customers that sign up for the service will have to have the cable MSO install "professional-grade equipment" at their home.
Comcast has plenty of fiber to leverage. Over the past decade, the cable MSO has built a national fiber backbone across 145,000 route miles.
Jennifer M. Fritzsche, senior analyst for Wells Fargo, in research note wrote that as 1 Gbps services have become an emerging trend among wireline broadband providers, it's inevitable that cable operators like Comcast would make a similar move.
"As 1 GB connections become the 'new normal' (with T's GigaPower, Google Fiber and VZ's FIOS) we have long believed that cable - especially as it nears the close of the industry merger between TWC and CMCSA - would not cede the field in terms of speed," wrote Fritzsche.
While 2 Gbps is certainly new, Comcast has had plenty of experience in delivering multi-gigabit service. Since 2010 the service provider has been offering 10 Gbps to business customers.
To make the Gbps service a reality, Comcast plans to use a mix of its existing HFC cable via DOCSIS 3.1 technology and fiber.
"We are currently testing DOCSIS 3.1, a scalable, national, next generation 1 Gbps technology solution," wrote Marcien Jenckes, executive vice president, Consumer Services of Comcast Cable, in a blog post. "We hope to begin rolling out DOCSIS 3.1 in early 2016, and when fully deployed, it will mean almost every customer in our footprint will be able to receive gigabit speeds over our existing network (a combination of both fiber and coax)."
Comcast is not the only MSO putting its stake into the Gbps broadband game. Fellow cable operator Cox Communications announced last year similar plans to deploy a mix of fiber-to-the-home (FTTH) and DOCSIS 3.1 technology to deliver 1 Gbps services to its residential customer base.
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