2014: Year of the Gigabit?

Erik Keith

Erik Keith

Summary Bullets:

• 2014 will go down as the year that Gigabit access became a tangible reality, with more than 100 substantial deployments attracting mainstream media attention and garnering some limited consumer mindshare.

• Cable operators, after first dismissing the need for Gigabit services, flip-flopped in 2014, asserting their own DOCSIS 3.1-powered Gigabit service roadmaps, to counter the various rival threats.

2014 was a pivotal year for fixed broadband access. More specifically, Gigabit access. While Gigabit residential broadband services have been available in some selected markets for years – most notably, Hong Kong – and a handful of operators in both Europe and North America have also offered Gigabit services (Hyperoptic in the UK, EPB in the US), these have been the extreme outliers, representing a tiny fraction of FTTH customers, let alone fixed broadband users. The Google Fiber footprint still numbers less than 10,000 subscribers at this point, despite the hype.

But in 2014, we saw a surge in both Gigabit “visibility” and in actual service deployments.

Also notable was the change in stance by North American cable operators. Following Google Fiber’s announcement adding Austin, Texas as a target market in 2013, both Comcast and Time Warner Cable strongly downplayed the value of Gigabit connection speeds, effectively denigrating the need for ultra-high-speed broadband, along the lines of Americans don’t need or want Gigabit services.

But after AT&T announced plans to offer its GigaPower service to 100 municipalities within 21 U.S. metros, and CenturyLink followed suit with public declarations of Gigabit services in Denver and eight other metros, the cable operators flip-flopped on Gigabit access. Comcast not only pulled an about face on Gigabit access, but also went to the extent of obtaining a patent on “True Gig” marketing slogan, well ahead of offering any Gigabit residential services.

It is important to remember that in North America, the cable operators remain the dominant providers of fixed broadband services, not to mention pay-TV services. So, the significance of Comcast reversing its stance on Gigabit access essentially means that the threat posed by the likes of Google Fiber, AT&T, CenturyLink and a smattering of smaller (and usually geography-limited) operators such as electric utilities (Chattanooga’s EPB), municipalities and other alternative operators is being taken seriously by the cable industry. As of late 2014, both ADTRAN and Calix are claiming to support more than 50 Gigabit customer deployments.

And how will cable deliver Gigabit speeds, especially in a mass market fashion? Well, many cable industry luminaries assert that Gigabit speeds are supported by the DOCSIS 3.0-enabled HFC networks, right now. Specifically, DOCSIS 3.0 already supports Gigabit-to-the-node throughput (i.e., 1 Gbps downstream), with the major caveat being that the Gigabit is shared by X number of end users, with X typically being 500, 250 or 125 households.

However, the next big leap forward for the cable operators will come with DOCSIS 3.1, which will deliver 10 Gbps per node downstream, and 1 Gbps/node upstream. Again, this is shared bandwidth across hundreds of users, but thanks to statistical multiplexing – the gift that keeps on giving – the ten-fold increase from 3.0 to 3.1 will give cable operators the ability to offer Gigabit services for subscribers willing to pay for it.

Closing out the year, two additional Gigabit network build-out announcements in December are worth noting. First, MVNO Ting Mobile announced its plan to build a Gigabit network in Charlottesville, Virginia, following its pending acquisition of Blue Ridge InternetWorks (BRI). However, Ting Mobile still has to invest substantial capital to make greater Charlottesville a “Gigabit City.”

The second Gigabit network build of note is in Minneapolis, Minnesota, where US Internet has announced it will build out a fiber network to deliver not 1, but 10 Gbps services to interested subscribers. While the $399/month price for 10 Gbps is very steep for residential subscribers, there are no doubt hundreds – if not thousands – of business customers champing at the bit for a 10 Gig broadband connection, for approximately the same cost of a telco T1.

With all of this Gigabit activity in 2014, there is only one thing left to say: Bring on 2015!

About Erik Keith
As Principal Analyst for Fixed Access Infrastructure, Erik is responsible for tracking major technological, strategic and tactical developments in the wireline broadband access market. Erik's primary areas of coverage include FTTP/PON systems, DSLAMs, DLCs/MSAPs, cable access and head-end systems, as well as digital media infrastructure solutions.

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