Friday, 26 September 2014

Adore the war of words between carriers and Google? Google just smiles sweetly at Cincinnati Bell

Just this week, Cincinnati Bell began a marketing campaign for its 1 Gbps fiber-to-the-premises (FTTP) plan, which it will debut in September. Typical of the traditional ILECs, Cincinnati Bell has revealed no additional information on pricing or what parts of the city will be the first to get the service, which is an extension of its corporate 1 Gbps service to small and medium-sized businesses (SMBs). An extension to residential customers is expected next. So what is prompting the telco's 1 Gbps drive? In March, Cincinnati leaders approached Google Fiber about bringing their service to their city. At this point, the Internet giant has yet to name Cincinnati, or any new cities, as their next 1 Gbps service destination. 


Previously, Cincinnati unsuccessfully applied to become a Google Fiber city. Cincinnati's leadership wants to make the city a more competitive high-tech force. Having the gigabit connectivity availability for local businesses is one step in that direction. Perhaps not surprisingly, not long after the city leaders' story came out, Cincinnati Bell's Ted Torbeck wrote an opinion column for the Cincinnati Enquirer. He said that although Cincinnati Bell welcomes the competition, it has already built a sizable 5,700-route-mile fiber network that reaches over 7,000 businesses and more than 276,000 households. 

Fioptics passes about 40 percent of potential customers in Greater Cincinnati, and Cincinnati Bell has developed a plan to cover 60 to 70 percent of Cincinnati with the service by 2017. Cincinnati Bell is not a newcomer to the FTTP game, having offered its Fioptics FTTP-based residential service since 2009. However, it only offered download speeds ranging from 10-100 Mbps, with each speed tier including asymmetric upload speeds. Delivering 1 Gbps fiber-based service is not foreign territory to Cincinnati Bell. Since 2001 the service provider has been providing 1 Gbps services to its larger corporate clients. This June it began extending the higher-speed service to SMBs, including business incubator The Brandery. 

Cincinnati Bell wasted no time in taking a stab at its main competitor, Time Warner Cable, on its Fioptics site, touting that its 1 Gbps service is "20 times faster than Time Warner Cable's fastest internet speeds for residential customers." That's not to say that TWC isn't interested in 1 Gbps services. The cable MSO said in July that it is participating in Los Angeles' request for information (RFI) process that will target the buildout of a communitywide 1 Gbps network. But in the near term Cincinnati Bell can claim an advantage over TWC. Cincinnati is also not on the list for TWC's TW Maxx all-digital upgrade next year, which includes a 300 Mbps speed tier. Whether or not Google Fiber comes to Cincinnati or even to Ohio, it's not hard to overlook the effect that its initiative has had on the broadband industry overall. Just take a look at the recent activity of a number of Tier 1 and Tier 2 ILECs and a host of cable operators. 

Throughout this summer, a host of traditional telcos (AT&T, CenturyLink and Comporium) and cable operators (Suddenlink Communications, Bright House Networks, GCI Communications and Cox Communications) have announced plans to deploy 1 Gbps service. Both AT&T (NYSE: T) and CenturyLink (NYSE: CTL) have clearly set the most ambitious goals. These providers announced plans to deliver services to a proposed 100 and 16 cities, respectively. How broad these actual deployments will be is anyone's guess. Offering higher speeds for the Fioptics service, which has been one of its key revenue sources, is important for Cincinnati Bell as it looks to enhance its identity as a fiber-centric broadband wireline provider. This means that even if Google Fiber never sets foot onto Cincinnati soil, Cincinnati Bell needs to be prepared to have a competitive offering that residents and businesses want vs. running the risk of becoming an obsolete slow-speed provider.