Broadband Cable Association of Pennsylvania


May 31, 2012

Verizon Communications Inc. is boosting Internet speeds in its FiOS service tiers and will double the fastest download speed to 300 megabits a second. The fastest upload jumps to 65 megabits a second from 35 megabits. Bandwidth-hogging video and the proliferation of home devices is driving Internet consumption, the company said. The faster speeds - which take effect in June - allow the FiOS network to move data more quickly.

The average home now has seven Internet-connected devices using a wired or WiFi Internet connection and by 2015 the average home is projected to have between nine and 15 Internet-connected devices. In 2005 only 10 percent of Internet traffic consisted of online video. That percentage could be 50 percent in 2012, and 90 percent within a few years, Verizon said. At 300 megabits, a two-hour standard-definition video could be downloaded in 40 seconds, compared with about 13 minutes at the fastest DSL speed of 15 megabits per second.

Comcast Corp.'s fastest speed is 105 megabits per second when downloading and 20 megabits for uploading. It costs about $130 month when purchased in a bundle. Brian Roberts, Comcast chief executive officer, has said the cable company's network can boost Internet speeds to one gigabit per second. Verizon said prices for its new speeds will be available in June. John Schommer, Verizon's director of product development for broadband and cloud services, said the higher new speeds will be available to the "vast majority" of Verizon customers. Some FiOS customers may need an equipment upgrade. There is no current plan, Schommer said, to charge extra for heavy Internet users - so-called consumption-based billing. "We don't have it today. We will always look at it and evaluate it. We are not saying we will never do it," he said.

Philadelphia-based Comcast has said it would charge extra for very heavy Internet users. Verizon's FiOS Internet service has about 5 million broadband customers and is a major competitor to Comcast's Xfinity service, which is the nation's largest residential broadband service with about 18 million nationwide subscribers. Xfinity has been taking customers from Verizon's slower DSL service in areas where Verizon has not built-out the FiOS, or fiber, network. The top Internet speed on Verizon's DSL service, which is run over copper phone lines, is 15 megabits per second. Verizon is currently upgrading its network in Philadelphia for FiOS and many areas in the suburbs already have FiOS. Philadelphia Inquirer; Bright House Networks isn't worried (Tampa Bay Times)

Few issues unite AT&T Inc., Google Inc., Microsoft Corp. and Intel Corp., but the idea of new international regulation of the Internet has managed to do so. Those companies and many others are backing a U.S. effort to block a United Nations agency from extending its powers to the Internet. They say new regulation could increase costs for U.S. corporations offering online services abroad.

The U.N. body, known as the International Telecommunication Union, has long set rules and rates for connecting telephone calls across borders. It is set to meet in Dubai in December to discuss a possible new treaty governing the exchange of Internet data. "People talk about Internet-related governance issues all the time, but what makes this materially different is that this is a treaty. It has real legal ramifications globally," said David Gross, a former deputy assistant secretary of state during the George W. Bush administration. Mr. Gross now represents a coalition of technology and Internet companies including Google, Comcast Corp. and News Corp. that are worried about the proposed regulations. News Corp. owns The Wall Street Journal.

Mr. Gross is scheduled to testify Thursday at a House hearing about the possible new global regulations and the Obama administration's efforts to stop them. The International Telecommunication Union was created in 1865 to regulate global telegraph services. It later extended its influence to telephone lines. The ITU summit is expected to pit countries including the U.S. and several European Union nations that favor decentralized Internet regulation against many Arab nations, Russia, China and others that favor more centralized control under U.N. auspices.

The current system of voluntary Internet regulation is dominated by ICANN, a U.S.-based nonprofit that oversees Web addresses, and nonprofit groups that develop network standards. At a conference last year, ITU Secretary General Hamadoun Toure acknowledged that "some countries are wary of excessive regulation" but said a global framework of Internet regulation was necessary because of the convergence of services online. He said the framework would help "avoid any catastrophe" and "help to ensure the continued growth and prosperity of a sector that is a significant contributor to the gross national product of most countries." U.S. Internet and content providers are particularly concerned about proposals that would allow the ITU to set rates for the exchange of Internet data across borders. Currently, Internet providers such as AT&T reach private agreements with other international phone companies for handing off Internet traffic as it goes across the world.

U.S. broadband providers are concerned the ITU would set higher rates for such "peering" agreements to allow countries with state-owned telecommunications systems to make back some of the revenue they have been losing over the past few years as phone calls have moved to the Internet. U.S. Internet companies are concerned they could also get hit with new fees for providing services to global audiences. "Right now, only 8% of international traffic is traditional analog voice communications. Some carriers are losing revenue as the world moves to [Internet protocol]. Regulators see their role going away," said Tom Tauke, Verizon Communications Inc.'s executive vice president for public affairs, at a Washington conference last month. "So both have an incentive to not just hold on to the old rule, but expand it to the new world of the Internet."

A variety of proposals are circulating in advance of the December conference, and it isn't clear yet which will be formally discussed. Opponents of ITU regulation argue that if the ITU approves a treaty giving it authority over Internet lines, some countries, including the U.S., could refuse to ratify it. That could result in two Internets, one under the ITU's rules and one not, they say. "If you end up with two worlds, one that's regulated and one that's unregulated, that will start to stifle the develop of the Net on both halves," said Robert McDowell, a Republican commissioner of the Federal Communications Commission who has campaigned for months to raise awareness of the ITU proposals.

Several plans to allow the ITU to take over Internet regulation, and which the U.S. considered most worrisome, appear to have been abandoned in recent months, but there are still some proposals that "could lead to things that we wouldn't like," said Philip Verveer, the State Department's coordinator for international communications policy. Earlier this week, the White House named Terry D. Kramer, a former Vodafone executive, to lead the U.S. delegation to the conference. Wall Street Journal

Apple hopes developers want their iTV. The company is expected to show off software at its June 11 developers conference that could be a window into what an Apple TV will look like. Also, CEO Tim Cook excited Apple fans this week by discussing the prospect of a new product line, setting off a new round of Wall Street speculation on the Apple TV. Gene Munster of Piper Jaffray said Apple could announce the TV by early December, causing a freeze in purchases of TVs made by other manufacturers before the iTV ships in early 2013.

Fresh hints could come at Apple's Worldwide Developers Conference, according to Brian White of Topeka Capital Markets. "The company will need to provide developers with a head start to develop specific applications for the device," White wrote in a note to the company's investor clients. The flat-screen version could come in sizes ranging from 42 inches to 52 inches, costing between $1,500 and $2,000, almost twice as much as the typical Internet TV, Munster has said.

The iTV also is expected to come with the Siri voice-activated controls like the iPhone 4S. Apple has been in talks with a number of major networks and studios about streaming content over the Web, which would bypass cable companies' living-room domination. Cook, speaking at the All Things D conference in Rancho Palos Verdes, Calif., said Apple was working on "incredible" products, and talked about the company's TV flirtations. "This is an area of intense interest for us," Cook said. "We are going to keep pulling the string and see where this takes us." Some analysts believe owning a piece of the flat-screen market could add another $10 billion to Apple's annual sales, which were $108.6 billion in fiscal 2011 ended Sept. 30. New York Post