Comcast's Gigabit Cable Deployment Spells Big Trouble for AT&T


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Dec 3, 2003

Last week Comcast announced it would be deploying gigabit cable to five cities this year: Atlanta and Nashville early in the year, with Chicago, Detroit, and Miami later in 2016. Comcast isn't yet revealing how much the service will cost, or whether Comcast's unpopular usage caps will make an appearance. But thanks to the relatively low upgrade cost of DOCSIS 3.1, Comcast is expected to deliver the faster gigabit speeds to "nearly all" of the company's footprint by the end of 2017.

And that spells trouble for AT&T.

AT&T has been generating a lot of hype for the company's highly-selective "Gigapower" gigabit broadband deployments. And while AT&T's heavily marketed the service to make deployment of it seem notably larger than it actually is, the company is primarily (with a few exceptions in places like North Carolina) taking aim at higher end housing developments, campus dorms, and other areas where fiber was already in the ground.

Elsewhere, AT&T's still relying on its traditional fiber to the node U-Verse infrastructure, which remains distance and speed constrained. And when Comcast comes to town, the company's simply not going to be able to respond adequately, notes analyst Sean Buckley. Assuming, that is, Comcast is willing to compete on price.

"If Comcast is serious about getting a large group of customers to buy their gigabit broadband e-services, the cable MSO will have to offer them at an affordable price," Buckley notes. "By pricing them right, Comcast has the opportunity to force the pricing hand of AT&T and Verizon. Already, Google Fiber has been able to do this in markets like Austin, Texas, where AT&T offers GigaPower."

And Comcast in turn is being pressured by Google Fiber, just on a much smaller scale. Google Fiber's plans in Atlanta are clearly worrying Comcast, which -- thanks to limited competition -- decided it would be a good idea to impose usage caps and overage fees in the market. If you're lucky enough to live in a market where all three companies will soon be forced to compete, you'll be one of those rare Americans lucky enough to see what actual broadband competition is supposed to look like.

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