08.06.2014Personal Tech

The Innovation Tide that Raises all Boats

Verizon has once again shown its leadership in consumer broadband with its recent decision to increase FiOS Internet upload speeds to match the download speeds. With this move, Verizon ups the ante, yet again, for cable company competitors that have been playing catch-up to FiOS Internet with their DOCSIS 3.0 broadband services.

For nearly a decade, the FiOS fiber-to-the-home (FTTH) infrastructure has set the standard for download speeds, and I have no doubt that competing Internet providers will also find it necessary to follow Verizon’s lead for faster upload speeds.

Video streaming and downloads are clearly driving demand for downstream capacity, but video uploads are also becoming more common as users capture and share their own video content – pushing the need for faster uploads. The broader adoption of consumer video communications, and especially high-definition video sessions will continue to grow and drive further need for upstream speed. Teleworkers also need faster upload speeds as these home-office workers use video conferencing, file sharing, unified communications and collaboration (UC&C), and cloud-based remote storage for their business.

"Video streaming and downloads are clearly driving demand for downstream capacity, but video uploads are also becoming more common as users capture and share their own video content – pushing the need for faster uploads."

Mobile devices, gaming consoles, home security cameras, digital video recorders and future smart home appliances all drive the need for faster connections in the home. Tablet and smartphone users manage their mobile data usage by offloading traffic onto a wired connection via their in-home Wi-Fi. Gaming consoles with multi-player, high-definition graphics generate increased demand for the kind of symmetrical broadband speeds now available with FiOS Internet. Home security cameras and digital video recorders (DVRs) that use Sling-like technology for remote viewing also drive upstream demand as the content from these devices is sent to the cloud for storage and distribution.

Longer term, the “Internet of Things” with devices such as smart refrigerators, connected light bulbs, and other connected home appliances will also require upstream connectivity.

Admittedly, demand for downstream capacity is now and will continue to be greater than upstream capacity. However, when FiOS was introduced in 2004 with a 30 Mbps download tier, skeptics suggested that users didn’t need that much speed. Today, every major broadband provider reports that the majority of Internet customers are trending toward faster Internet connection speeds, and Verizon reported that 55% of FiOS Internet customers subscribed to downstream speeds ranging from 50 to 500 Mbps at the end of Q2 2014. FTTH and DOCSIS technologies have made faster speeds available and affordable, and users have flocked to the available capacity.

Verizon continues to grow net FiOS Internet market share, now connecting more than 40% of homes that have access to FiOS Internet as of Q2 2014.

If there is a dark spot in all this, it’s that legacy DSL subscriptions will continue to decline because capacity is typically limited to 3-7 Mbps downstream, with upstream capacity less than half of downstream speeds. Fortunately, because Verizon has continued expanding FiOS Internet availability to more homes its new customer acquisitions and FiOS Internet conversions continue to offset its DSL losses – and Verizon continues to grow net FiOS Internet market share, now connecting more than 40% of homes that have access to FiOS Internet as of Q2 2014.

Ultimately, consumers win as Verizon continues to offer faster speeds. With a free upgrade for FiOS customers, this increases the value of FiOS services in the near term. As others follow Verizon’s lead with faster upstream tiers, all consumers will benefit as broadband providers move to meet evolving user needs.

Larry Hettick provides industry analysis and assessments of voice, video, data, and wireless service offered by cable companies and phone companies for the tech market intelligence firm Current Analysis. He also authors the bi-weekly VoIP and Convergence Newsletter for Network World magazine.