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Cablevision Plans Faster Internet Service Without Raising Price

Posted on: Monday, 7 November 2005, 21:00 CST

By Martha McKay, The Record, Hackensack, N.J.

Nov. 8--Faced with a looming threat from phone giant Verizon, Cablevision unveiled plans Monday to speed up its Internet service.

The Bethpage, N.Y.-based cable giant, which serves about 1 million northern New Jersey homes, said by the middle of next year it will raise the speed of its flagship consumer Internet service -- Optimum Online -- without raising its price.

Aiming straight at Verizon's new fiber network, Cablevision also plans to sell a higher-speed service significantly cheaper than a comparable service offered by the phone company.

The move comes as Verizon builds its fiber optic network in New Jersey with 82 towns installed by year's end.

Cablevision has had success selling both Internet-based phone service and high-speed broadband service, going head-to-head with Verizon's DSL Internet service, which is delivered over the phone company's old copper network.

The fiber optic network has the capacity to surpass both its own DSL service and cable's existing network.

The phone company has plans to sell TV service, as well as phone and Internet, over the new lines, posing a direct competitive threat to Cablevision, as well as Comcast, Time Warner and US Cable of Paramus and Hillsdale, each of which serve portions of North Jersey.

Verizon, which is fighting for a statewide video franchise that would let the company bypass local authorities, wants to lure heavy Internet users with its fast service, and then sell TV packages to those customers. It says it will undercut cable TV prices to gain subscribers.

Cable companies, having seen satellite TV eat up almost 24 percent of the video market, are wary of the phone company's threat.

Cablevision spokesman Jim Maiella said his company's decision to increase speed was not in reaction to Verizon's move.

"These new speeds and service levels build upon the most successful and popular high-speed Internet service in the market, offering speeds that have never been deployed across an entire metropolitan area," Maiella said.

Jeff Kagan, an independent telecommunications analyst, called the move "a direct result of their early competition with [Verizon]. It's way too early to call either side the winner, but one thing is for sure, the customer will be a real winner."

By mid 2006, Cablevision said it will increase download speed from 10 Mbps (megabits per second) to 15 Mbps and the upload speed from 1 Mbps to 2 Mbps. The monthly price for this service -- $50 for non-TV customers and $45 for TV customers -- will remain the same.

The company will introduce a new tier of service -- 30 Mbps download/2 Mbps upload -- for $65 a month aimed at heavy Internet users and small businesses. It's less expensive than a similar Verizon service, which costs $180 per month for the same download speed and 5 Mbps upload.

Cablevision addressed a frequent complaint of cable Internet users who say their service slows down when many people Web surf at once.

The 30 Mbps service, dubbed Optimum Online Boost, "will travel on its own dedicated portion of Cablevision's completed fiber-rich network to ensure an extremely high level of service regardless of its penetration or the propensity of customers to use bandwidth-heavy applications."

Cablevision also said it is ready now to sell a 50 Mbps download/50 Mbps upload service.

It declined to divulge pricing, saying only that this is a "unique" service that will be marketed directly to high-use customers.

Verizon spokesman Rich Young said Cablevision "knows we have a superior product and they are reacting to it."

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Copyright (c) 2005, The Record, Hackensack, N.J.

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Source: The Record - Hackensack, New Jersey

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