Comcast has been holding out on us, but it’s out of tricks up its sleeve

Comcast-LogoWhen Google Fiber announced in Provo, it didn’t take long for Comcast to immediately whip out a new 250Mbps/50Mbps tier and match the announced price. The reaction isn’t all that surprising. They needed to look like they’re doing something to try and retain customers, and current modems meeting the DOCSIS 3.0 standard can max out at 343Mbps/122Mbps. Unfortunately, Comcast, in one move, almost entirely exhausted the available juice in its system without a massive overhaul of their operations. Could it be that they’re not going to be able to upgrade any further without a huge cash infusion?

Looking at the DOCSIS 3.0 standard, it allows for bonding up to 24 downstream and 8 upstream channels. This provides a peak theoretical bandwidth of 1029Mbps/245Mbps. Unfortunately, cable providers like Comcast have had trouble enough meeting the demand for 8 downstream and 4 upstream channels. With hundreds of channels (many now in HD), reclaiming spectrum has been very tricky. Despite tricks such as headend upgrades to H.264 (and, soon, H.265), using digital-to-analog adapters for customers who won’t upgrade to a digital package, and exploring IPTV, the system remains tapped out. The systems usually only support 6MHz channels across about 1GHz of total space or about 165 total channels. With nodes containing as many as 200 users, even a high 14:1 oversubscription ratio would mean dedicating at least 60% of the available channels just to broadband users, something that would crowd out their core TV product.

This is why Comcast has had to resort to very expensive FTTP upgrades to push their 505Mbps/65Mbps service in markets where Verizon’s FiOS has been chipping away at their market share. Even then, they want $500 to get service and charge a $1,000 ETF if you don’t stick with them for long enough. The hardware has also lagged behind with a limited number of modems that can push that kind of speed. Comcast also charges over $400/mo for the product, well out of reach of your typical user.

So where would Comcast do these kinds of upgrades? So far, it’s primarily in areas with only one wireline competitor that offers somewhat comparable speeds. To date, that means areas with Verizon FiOS. Tiers beyond 105Mbps haven’t shown up anywhere in Utah outside of Provo. Even there, Comcast won’t go beyond what their current 8-channel DOCSIS 3.0 deployment is capable of. Areas with CenturyLink DSL? No need to surpass 50Mbps at most. ADSL2+? 105Mbps is faster enough to keep their heads above water. Areas with gigabit fiber? Invest the bare minimum needed to get low-end users on the cheap because they know they can’t match the speeds.

What we’re seeing in Provo is all Comcast has got: pushing the system to and sometimes past its reasonable limits, and yet still falling woefully short. With a poor reputation for customer service and CenturyLink ceding markets, it seems obvious that Comcast is about to enter a slow bleed phase with very limited upgrades targeted at areas without gigabit fiber. Funny, that sounds a lot like what CenturyLink is now.

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2 Responses to Comcast has been holding out on us, but it’s out of tricks up its sleeve

  1. Chris C. says:

    When Cable Labs finalized the Docs is 3.1 specs last October, how do you foresee that changing the landscape when those modems are commercially available in 2015?

    • Jesse says:

      Too little, too late. It’s only a 50% bump over the current speeds using the same spectrum. Instead of 60% of the network for gigabit, it’d have to be 40%. That’s still a huge amount, and the networks are going to have a lot of trouble doing it.

      There’s also the question on if they’ll invest. I don’t think they will. Comcast has been very busy bringing content producers under its roof to create a vertical monopoly. With all of the money they just spent on DOCSIS 3.0 upgrades, I doubt they’ll be eager to turn around the rip it all out except in the markets mentioned above.

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