Anyone moving into the Woodmont beach section of Milford might be surprised to learn they have more than two options for $60-a-month gigabit fiber internet service — double that number in fact, as advertised online by Optimum, Frontier, GoNetspeed and now Xfinity from Comcast, with varying promotions for signing up.
Will any of them dip below that base $60 rate in the coming year? For its part, Altice USA says it intends to do so, as competition intensifies between service providers large and small for the biggest bandwidth services.
Decades after Connecticut carved out municipal franchise territories to allow cable television companies to cover the cost of installing coaxial lines, Comcast is now venturing outside of its original turf in the state. In doing so, Comcast is showing a willingness to take on Optimum in select cities and towns with its Xfinity fiber broadband service, as well as Breezeline in eastern Connecticut and deepening its existing rivalry with Frontier.
Comcast, Frontier, Altice USA and other big broadband providers have been stringing fiber optic cable for years to provide faster speeds to customers, with Breezeline having pledged to begin rolling out fiber broadband service as well.
A third major competitor in any one community could help drive down prices. Add a fourth, and there is legitimate potential for a price war, or at the very least, more options for customers to switch if any provider’s service is coming up short.
“High-speed data — it’s very competitive right now, but it’s also a very healthy business,” said Michael Cavanagh, president of Comcast, speaking at a UBS investment conference in early December “You look at what’s gone on with just one example, which is the move of more sports to streaming. … Already, Thursday Night Football with Amazon we’ve talked a lot about, it moved the whole peak of the Internet usage from Sunday night to Thursday night. So 25 percent of the volume that night — it needs to work, it needs to work well.”
But providers are feeling the pinch with pricing, if an index by the USTelecom trade group reflects broad market dynamics.
Over the past year, broadband providers dropped the price of their fastest Internet service by 6.5 percent, USTelecom reported. The prices for the most popular bandwidths were off 18 percent, going against the trend of overall inflation in the consumer economy.
The price declines are being driven by the need to win customers looking to leave older cable or DSL technologies for fiber, whether households that are moving or those looking to upgrade their speeds with the biggest bandwidth that fiber delivers.
Connecticut placed no geographic restrictions for fiber optic cable builds. But providers must go through an authorization process with Eversource, United Illuminating or Frontier to attach lines to poles.
Comcast has yet to announce any expansion to the Connecticut territories of Charter Communications or Cox, which combined provide service in nearly a third of Connecticut’s cities and towns. Charter has its headquarters in Stamford, where Altice USA has been the cable provider dating back to the days of Cablevision.
“We look at the density, the economics of development,” Comcast spokesperson Elizabeth Walden told CT Insider. “We also get inquiries from addresses that we don’t currently serve. We look at this from community to community.”
Residential video still represents the largest piece of revenue for Comcast across all its businesses, including broadband and its NBCUniversal entertainment arm. But for both Charter and Altice, the pendulum has swung to broadband from cable TV.
Nationally, fixed wireless broadband providers have been outstripping the growth rates for fiber optic broadband, according to a running tally by Leichtman Research Group based in Durham, N.H.
T-Mobile and Verizon added 940,000 subscribers in the third quarter for their respective 5G home broadband links to the Internet, compared to 520,000 account gains for the fiber optic services offered by AT&T, Verizon, CenturyLink, Frontier and smaller historic telephone companies.
Comcast chose New London for its first fiber optic build in 2018, when Frontier and Altice USA were beginning to string fiber in Norwalk in lower Fairfield County ahead of larger expansions statewide and nationally.
With a predecessor company of Breezeline holding local cable franchises in eastern Connecticut, the New London push put Comcast into direct competition with another cable broadband company.
Comcast extended its network west along the shoreline into Breezeline franchised territory in Waterford and East Lyme, as well as up the Quinebaug River valley to Plainfield, Putnam and Killingly where Breezeline provides service. Comcast also began offering fiber optic broadband in pockets of Hartford and Sharon where it is the legacy cable company.
Now Comcast is taking on Altice USA in the New Haven County municipalities of Milford, Orange and Woodbridge, and Watertown in Litchfield County. In Milford and Watertown, households will now have four “wire-line” broadband providers to consider: Altice, Comcast, GoNetspeed and Frontier.
In Connecticut, GoNetspeed has emerged as a fiber broadband alternative in more than 30 Connecticut cities and towns. GoNetspeed’s patchwork of fiber broadband service stretches from Fairfield and Bridgeport to select communities east of New Haven, and inland as far as north as Enfield at the Massachusetts border.
Now, GoNetspeed has begun running lines recently in the Litchfield County towns of Plymouth and Thomaston.
“If you think back six years ago what people were paying and what they had for options, it was very slim,” said Tom Perrone, chief operating officer of GoNetspeed which has just over 100 employees in Connecticut. “They had the two incumbents and they had the old technology that had been around for 34 years — and they had extremely high prices. So we saw that as an opportunity, and even though we were the small, new guy on the block, I think we’ve done a fairly good job of demonstrating to the entire state there could be more.”
Perrone acknowledged “it’s gotten way more competitive” in his words. But he said GoNetspeed is competing well in its service areas and continually adding new ones with the backing of private equity investment firm Oak Hill Capital.
Dennis Mathews, CEO of Altice USA, told investment analysts last month the company had its best three-month stretch to date for fiber broadband adds nationally, while acknowledging market competition is prompting the company to lower rates in the coming months.
“New rate cards on fiber will go into effect in the first half of 2024 and will reduce rates for new and existing customers,” Mathews said on a conference call. “We have ongoing pressure from competitive fiber operators and fixed wireless.”
Tyler Fields is your internet guru, delving into the latest trends, developments, and issues shaping the online world. With a focus on internet culture, cybersecurity, and emerging technologies, Tyler keeps readers informed about the dynamic landscape of the internet and its impact on our digital lives.
