2 More Gigabit Access Offers

By Gary Kim February 06, 2014

Telecom cooperative Canby Telcom plans to provide a gigabit symmetrical Internet service for its customers in Canby, Ore., located south of Portland, Ore.

Canby Telcom’s service area encompasses 84-square miles that represents the city of Canby, Oregon and includes unincorporated areas that border Canby city limits. Canby Telcom serves 9,000 access lines and 7,000 customers.

The new service will be particularly valuable for multi-user households. The typical U.S. household has six Internet connected devices, and many homes with teenagers or technical jobs have 15 or more, Canby Telcom says.

Service availability is scheduled for the second quarter of 2014 and will be limited to select areas within the Canby Telcom “FOz” (fiber optic zone) footprint.

It isn’t yet clear what the service will cost. At the moment, Canby Telcom sells a 60 Mbps service, with 30 Mbps return, for $80 a month.

Separately, CenturyLink announced gigabit access for more than 2,500 businesses located in multi-tenant unit office buildings throughout Salt Lake City, Sandy, Midvale, Draper, South Jordan, West Jordan, Cottonwood Heights and other area municipalities.

Neither of those announcements affects the availability of gigabit service for most consumers in the United States, but each is part of a continuing trend of access speed increases that roughly match levels of progress one would expect from Moore’s Law, namely a doubling of capacity about every 18 months.

With the caveat that consumers often do not buy the top-rated available speed, but typically packages that offer what consumers consider to be reasonable value-price offers, the relatively quiet process of speed increases continues.

Whether the typical consumer will buy a gigabit service, by about 2020, is not so clear. What is more clear is that such speeds will be generally available to most U.S. consumers, by about that point.

Perhaps the bigger question is what gigabit services will cost in 2020. Generally speaking, the trend in the U.S market has been for average speeds to grow, at about a 50 percent a year clip, while absolute prices remain roughly stable, while premium services have been priced higher.

The issue is whether a gigabit service will remain the premium offering in 2020.

The other complication is that broadband speeds keep changing, so the product a consumer bought in 1998 is different from 2008 and will be different from what is purchased in 2018.

In 2002, only about 10 percent of U.S. households were buying broadband service. Back then, where a dial-up connection might have cost about $20 a month, a then-current broadband connection would have cost much more. Some of us were buying 756 kbps connections for $100 a month, back then, for example.

So one might argue either that monthly prices will remain roughly constant, while speeds grow, or that prices will grow as speeds increase. The “natural limit” would seem to be Google Fiber’s gigabit for $70 a month price point. It is hard to see triple-digit broadband prices for gigabit services in 2020, if $70 or $80 a month is the current price of a gigabit connection. 

Edited by Cassandra Tucker

Contributing Editor

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