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Summary:

If you live in the US, probably you haven’t noticed it. But fiber networks are growing in popularity, luring people with faster speeds, and now lower prices. PointTopic, the company that tracks the broadband markets says that fiber networks for consumer broadband access are now in […]

If you live in the US, probably you haven’t noticed it. But fiber networks are growing in popularity, luring people with faster speeds, and now lower prices. PointTopic, the company that tracks the broadband markets says that fiber networks for consumer broadband access are now in fact cheaper than cable connections.

According to a PointTopic report, FTTx tariffs went down 12% to US$28.1, three percent than the average monthly rental for cable modem services. Average access price for a monthly DSL connection is about $25; while cable costs $29.50 a month. Fiber is now going for $28.10 a month.


Fiber is getting a lot of traction in the overseas market, and has higher visibility in Asia and Europe. In the US, Verizon FiOS is the most visible manifestation of the FTTx trend.

Now we might not care much for the Verizon Wireless phone UI, but we would switch to FiOS with all its issues in a heartbeat.
Especially if Verizon promised us a future bandwidth upgrade, and of course if we live in Verizon territory. And better pricing.

Currently, for a 30Mbps/5Mbps Verizon FiOS connection you pay $179.95 per month and for a 15Mbps/2Mbps connection you pay $44.95 per month.
Regardless, the falling fiber access prices are going to help convince consumers switch away from DSL and cable.

‘DSL rentals had been undergoing major price reductions since the beginning of 2006′, points out Vince Chook. ‘But with such a small drop over the quarter, cable modem is certainly losing its price competitiveness.’

  1. Hi Om, why Korea and other countries can achieve 100Gbps while we are stuck at the low spectrum here. You wrote an article before but I feel this is ridiculous stifling our growth. I am surprised why leaders like Google, Microsoft can’t take initiatives on their own. The rates given by Verizon are not justified.

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  2. Om,

    On this note I ran across a news story the other day and wrote about a small town in NC who has taken matters into their own hands and are installing the fiber network themselves.
    http://www.eastcoastblogging.com/blog/2006/12/06/wilson-nc-local-government-installing-citywide-fiber-network/

    I think this ties into the data your show. Better yet I love the fact that Verizon will have to lease the city’s fiber lines.

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  3. Verizon appears to have patented rights to a Fiber to the Home Network technology in US Patent 6,961,335:
    “…for a local telephone company or similar carrier, utilizing multiple layers of optical fiber rings extending to the subscriber premises and to various elements of such a network architecture.”

    http://www.patentmonkey.com/PM/PatentID/6961335.aspx

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  4. the speeds mentioned are only maximum… But we all know the reality is a bit different. Now ofcourse if you are willing to pay more than $100 then I am sure you will achieve atleast 10MBps/2MBps. But if I want to stay within the $30-$40 range I am not sure I will achieve that much speedy n/w than what I get with my DSL today.
    But yeah, as you say Om, the trend shown in the graph is definitely encouraging and in the user’s favor. I am confident the speed/price ratio for fiber optics is bound to drop…I just hope it does in time for iTV/TiVo announcement in 4 weeks :-)

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  5. In my area, our providers are Verizon for fiber, and Comcast for cable. The following figures are for download speeds.

    Verizon’s prices according to
    http://www22.verizon.com/content/consumerfios/packages+and+prices/packages+and+prices.htm

    Up to 5 Mbps is $34.95
    Up to 15 Mbps is $44.95
    Up to 30 Mbps is $179.95

    Comcast’s prices according to
    http://www.comcast.com/shop/buyflow/default.ashx
    Up to 6 Mbps $42.95
    Up to 8 Mbps $52.95

    Very interesting article! I didn’t realize this, so thanks for the heads up!

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  6. i see diminishing returns for consumers upgrading their dsl or cable connections. even if it is a few times faster, it won’t improve the overall user experience much except in a few cases, like surfing youtube or watching tv shows online.

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  7. Currently, for a 30Mbps/5Mbps Verizon FiOS connection you pay $179.95 per month

    Depends on where, actually. In northern Virginia, it’s $54.95/month for 30Mbps/5Mbps. The NYC metro area is similar (strong competition with Cablevision).

    And the greater “visibility” aside, fiber is pretty hard to get in most any country, unless you’re in one of a few big cities. It’s not like it’s in France outside of Paris. In Japan, NTT’s fiber to the home was the first to launch and has a nice head start, but was still limited to central Tokyo and Osaka until very recently.

    Japan and France do have the advantage of having very high percentages of their populations in their capital cities (much higher than the US.) Pretending that everyone in France or Japan can get fiber, though, is just as ridiculous as pointing to Verizon’s FiOS and saying that its existence in some cities makes everything hunky-dory for everyone in the USA.

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  8. But we all know the reality is a bit different.

    No. Reality is exactly the speeds promised, at least as far as FiOS goes. Every speakeasy.net speed test I’ve tried gives me exactly the promised bandwidth, and everyone with FiOS over at Broadband Reports says the same thing.

    Now cable, of course, the theoretical maximums may not be hit as much.

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  9. But we all know the reality is a bit different.

    No. Reality is exactly the speeds promised, at least as far as FiOS goes. Every speakeasy.net speed test I’ve tried gives me exactly the promised bandwidth (well, 14.95Mbs down and 1.95 up, accounting for overhead), and everyone with FiOS over at Broadband Reports says the same thing.

    Now cable, of course, may not hit the theoretical maximums as much.

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  10. Pardon my ignorance but won’t we run into speed caps just because the serving website can only go so fast. Meaning, even if I can download at 30mbps, not sure how many online services are out there which have beefy hardware and network pipes to actually put out data at this rate. Or I am totally missing something?

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