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Broadband speeds outpacing demand

By Hiawatha Bray
Globe Staff / July 9, 2012
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Over the past five years, Daniel Sofer has signed up for every boost in Internet speed offered by Verizon Communications Inc., his home service provider.

But when he got Verizon’s newest high-speed service, it was “the first time I’m not feeling that thrill of exhilaration when I connect,” said Sofer, a photographer and website designer in Hermosa Beach, Calif. The problem: The extra speed made no difference.

In the highly competitive cable market, broadband speed is a major selling point for Verizon and broadband rivals like Comcast Corp.’s Xfinity service. Carriers frequently boost the broadband speeds they offer in their relentless pursuit of new subscribers. But while the extra speed can pay off for households with multiple users, it can be overkill for many consumers.

FiOS Quantum, the ultra-swift broadband service that Verizon launched in June, offers Internet download speeds of up to 300 million bits per second for a price of up to $209.99 a month. The company says that’s fast enough to download a high-definition Hollywood movie in about two minutes. “That’s like driving a Porsche or a Ferrari,” said Roger Entner, an Internet analyst for Recon Analytics LLC in Dedham. “You know it can go really fast. But does it really make a difference in the real world? No.”

The problem is that most of the Internet isn’t transmitting data fast enough to take advantage of such rapid broadband speeds, Entner said. If a server computer transmits an Internet video at, say, 20 million bits per second, having a 300-million-bits-a-second connection won’t make any difference. “The website you are connecting to is the bottleneck,” he said.

The Federal Communications Commission, responding to reports that the United States lags behind other major countries in Internet speed, is also encouraging cable providers to introduce superfast broadband services, Entner said. “At least we can quote it in our studies . . . and say, ‘Hurrah, the US has the fastest Internet,’ ” he said. “It’s actually a game of bragging rights.”

Verizon officials were unavailable for comment, although a spokesman said Quantum will be available to most of the 5 million people who use FiOS Internet service in Massachusetts, 13 other states, and the District of Columbia.

Catherine Avgiris, executive vice president and general manager of communication and data services at rival Internet provider Comcast, said her company’s premium online offerings are mainly intended for homes where multiple family members engage in heavy Internet use.

“The average household has a laptop, has a gaming system, they have a tablet,” said Avgiris. “The more devices there are in the home, the better performance you get by having greater speed.”

Avgiris wouldn’t say how many customers sign up for Comcast’s Xfinity fastest broadband service, which tops out at 105 million bits per second. But she did say that about a quarter of Comcast’s 18.6 million Internet subscribers choose speeds of 25, 50, or 105 megabits. Most subscribers choose speeds of three, six, or 20 megabits. At about the same time Verizon announced FiOS Quantum, Comcast said that 30-megabit subscribers would get a free speed increase to 50 megabits, while existing 50-megabit users would be bumped up to 105 megabits, at no extra charge.

Avgiris said Comcast’s data network is quite capable of matching FiOS Quantum’s 300-megabit speed, adding that the Xfinity system delivered data at 1 billion bits per second in a demonstration in Chicago last year. But she said that for now, there’s no sign that consumers are interested in such massive bandwidth. “I’m not sure there’s a market today for one gigabit,” she said. “In five years, 10 years, who knows?”

Even skeptics like Entner predict that consumers will eventually need superfast Internet connections. For example, TV companies are beginning to develop “4K” technology, a new video standard that would make TV images far sharper than today’s high-definition sets. Streaming 4K programs over the Internet would require a big speed boost, and could lead to surging demand for snappier connections.

But for most consumers today, the fastest Internet services are solutions to a nonexistent problem. “It’s one of those nice things where technology has progressed faster than our need for it,” said Entner.

Hiawatha Bray can be reached at bray@globe.com.

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