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Gigabit Internet access grows out of its niche

Steven Max Patterson | July 27, 2015
Google Fiber launched in Kansas City in 2011. It offered gigabit speed at $70 per month and ignited the development of an ultrafast Internet access category that has since spread throughout the U.S.

gigabit internet

Google Fiber launched in Kansas City in 2011. It offered gigabit speed at $70 per month and ignited the development of an ultrafast Internet access category that has since spread throughout the U.S. According to Michael Render, principal analyst at market researcher RVA LLC, 83 Internet access providers have joined Google to offer gigabit Internet access service (all priced in the $50-$150 per month range).

Render's data shows that new subscribers are signing up at an annualized growth rate of 480 percent each year. Between the third quarter of 2014 and the second quarter of 2015 gigabit, subscribers grew from 40,000-174,000.

With download speeds 40 times faster and upload speeds more than 300 times faster than the Federal Communications Commission's broadband standard, gigabit Internet sounds both revolutionary and using current ISP pricing models downright unaffordable. But gigabit Internet quietly evolved and competition drove prices down, such as Comcast's commitment to deliver 2 Gbps internet access in Atlanta and Time Warner committing to 1 Gbps service in Charlotte, both in response to Google Fiber and other gigabit competitors.

Just a decade ago, fiber to the home (FTTH) was an exclusive realm of big telecom companies. At that time, Verizon proved that a large Internet access network with fiber optic infrastructure serving millions of subscribers was possible. Thanks to the reduction in the cost and complexity of building and operating a gigabit Internet access network, today smaller organizations like municipal power utilities and real estate developers have become gigabit ISPs.

Fiber optic cable passes 25 million American homes, according to Render, with 11.6 million FTTH connected homes as of the second quarter of this year. And hooking up the remainder of the 25 million homes passed doesn't require a network upgrade because most of this ISP infrastructure equipment connecting the existing FTTH customers was designed as a gigabit-capable passive optical network (GPON).

Living in a material world

The total cost of installed gigabit and faster fiber optic cable infrastructure has dropped 80 percent during the last decade, as manufacturers have redesigned the fiber optic cable products to optimize for low-cost, large scale deployments. Optical cable has become much more flexible, so it can be run inside homes and buildings, joining the customer's network with much lower-cost optical terminals.

Cable splicing and connection that required specialist a decade ago can now be performed by a craftsperson using inexpensive equipment. Fiber runs further into buildings where lower-speed copper cable was once used for its flexibility. The newest indoor fiber optic cables can be bent around corners and are so small they can be glued into place and are virtually invisible.

 

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