Thursday, April 02, 2009

Cox Gets 50 megs (Updated)

Cox announced yesterday that it is launching its first DOCSIS 3 product, a 50 meg down "ultimate" tier in, of all places, Lafayette, LA. That's a huge feather in the cap of Lafayette and is certain to get Lafayette press across the country.

Despite the fact that yesterday was April fools this appears to be no joke even though it has yet to make it onto the official Cox page... Cox really is launching it first offering of the much ballyhooed DOCSIS 3.0 service in Lafayette. DOCSIS 3 involves "channel bonding" —taking up a mutliple "chunks" of the available bandwidth on its hybrid fiber-coax systems and its current rollout by Comcast is widely seen as a response to the FIOS fiber to the home project being marketed by Verizon in its territories.

I first heard about Cox's launch through the Lafayette Technology Google group where the press release was posted but have since found references on Broadband Reports and the Baton Rouge Business Report, both of which add interesting details.

Here's the lowdown as gleaned from the press release and stories....
  • Speed down: 50 megs
  • Speed up: 5 megs
  • Install cost: $99.95 for a "pro install"
  • Modem cost: $99.99 from Cox (you must buy a Cisco DPC3000)
  • Introductory/Louisiana/Lafayette Price: $89.99/month
  • Regular/not Lafayette Price: $139.99
  • Contract length: ? not specified
  • Extras: 3 IP addresses, no transfer caps "at this time,"
  • Offered in Cox's footprint in Lafayette Parish--Broussard, Carencro, Duson,
    Lafayette, Scott and Youngsville
What's interesting about this announcement, of course, is that it represents an attempt to challenge LUS' just-launched service. The Business Report, however, posts that Cox national spokesperson
Ruble says the high-speed Internet was launched in Lafayette because of "loud and vocal demand." The Lafayette Utility System has launched its own fiber-optic Internet, phone and cable service. Ruble says LUS wasn't a factor in introducing the new service in Lafayette first.
That's a bit of newspeak if ever I heard it. "Loud and vocal demand" probably can be fairly interpreted to mean that Cox has finally heard what Lafayette said on July 16th four years ago when the people overwhelmingly voted to get LUS to provide them with fiber to the home. If you can look at it that way I guess that LUS wasn't a factor.....but it seems a pretty far stretch and I hope the local PR folks won't keep up such an unlikely position. Reasonable people have to think that what Lafayette has to recommend it as the place to launch a major new initiative is that it has a unfinished FTTH project. It is not a major market by Cox's standard...and is, in fact, the smallest market in Louisiana that Cox retained after shedding most of its rural and small city holdings (Alex and Lake Charles got the boot).

As a response to LUS' 50 meg offering it doesn't come off too well. Cox only matches LUS on download speed; upload is a 10th of what LUS offers and both monthly cost and upfront costs are higher. A comparison:
  • Speed down: 50 megs
  • Speed up: 50 megs
  • Install cost: 0
  • Modem cost: 0 (what modem?)
  • Introductory/Louisiana/Lafayette Price: No special pricing
  • Regular Price: $57.95
  • Contract length: No Contract
  • Extras: 100 meg intranet, Internet on cable box, Money stays in hometown (my favorite),
  • Offered in LUS' footprint in Lafayette Parish (the city of Lafayette currently)
On the upside is, mainly, that folks in the neighboring smaller cities can get 50 megs—and that has got to be a good thing. Theyll be able, for a price, to join the elite few in our country who have that much bandwidth. I've got family in Broussard and I know they've looked longingly at what the city is getting. Demand is great in the surrounding cities. What's interesting is everything I've heard Huval say recently has lead me to believe that LUS will move into the surrounding areas as soon as they are done with Lafayette proper. All the folks in the parish have to do is ask. It seems likely that Cox making this treat available is intended make take some of the fire out of those requests.

But will folks really be happy to pay more for what the people in the city are getting for less? Especially when they will still be outside the 100 meg intranet and have to make do with 1/10 the upload? It seems risky to me: It's one thing for fast bandwidth to be a "city" thing. It's another thing all together to be offered a product but to find out that you will be paying more for one that isn't of the same quality as what those in the city is getting.

Interesting times.

UPDATE: 1:25 PM, 4/2/09: The national prss release release is also available on PR Newswire. The Advertiser has a story up on the topic this morning: "Upgraded Internet launched." MarketWatch, reporting on a speech by Dallas Clement, Cox's senior VP of strategy and development, noted that Cox was rolling out their 50 meg docsis 3 service in Lafayette:
He added that the company will be careful about rolling out the service more widely, as it would be an expensive proposition. It will rely on what it learns about consumer demand for the service in a given location before committing to a new launch.
That explaination is a little puzzeling...a slow rollout makes sense in general if you are afraid that the demand won't be there. But if so, Lafayette seems an odd place to roll it out first: They can't possibly assess how it works for them in most of their footprint since our situation is uniquely difficult for them. In most places the 50 meg product would blow away the competition. It doesn't here.

UPDATE: The Independent Blog has a post on this subject as well. In it the national Cox representative takes a more realistic stand than the one she apparently took with the Baton Rouge Business Report:
While Cox says the decision was not based solely on the competion it faces here from Lafayette Utilities System, it clearly was a factor. “It has to do with competition period,” says Cox spokesperson Ann Ruble. “I think Greater Louisiana was chosen because we have competition from many different sides. This is described as a hyper-competitive market across the entire footprint, the Baton Rouge market and the Lafayette market. We put so much investment into Lafayette that it made sense for the first place to launch.”
That makes a little more sense; obviously launching your first docsis 3 product in a place where you have a competitor that is offering much greater speed than you are makes a certain specie of sense—especially if you realize that "Greater Louisiana" aka the Lafayette-Baton Rouge market is NOT getting this service. ONLY Lafayette is...Baton Rouge where there is no LUS doesn't get ANY access, not even at the 139 dollar level. The only thing that is "hypercompetitive" about the "Greater Baton Rouge" market is the presence of two fiber-based competitors. EATel in East Ascension also offers a FTTH alternative. Maybe Cox will offer it in Ascension Parish, where EATEL is offering Fiber To The Home, if EATEL puts up a 50 meg tier too. Either way, Baton Rouge is out of luck....

4 comments:

Speed said...

Lies, lies, lies...
Ruble says LUS wasn't a factor in introducing the new service in Lafayette first.
I wonder if they think anyone will believe that. I think it's obvious that Cox won't upgrade anything unless competition has forced their hand. They've already said that they intend to compete, so this is obviously their attempt to do it. However, I think it's too much cost too late. I love that LUS has no modem and the price and upload speeds are excellent. Cox still doesn't have any of these beat.

Dane said...

Hey John, I know it doesn't matter much but I don't think there is a $99 installation fee. Thats my understanding anyway, but I could be wrong.

All I can say about "says LUS wasn't a factor" is sigh.. catch me offline for personal opinion of that. ;-)

I am still of the opinion (despite anyones personal feelings) that this is a win for Lafayette in general. More good national press and more higher speed connectivity is a good thing for Lafayette no matter who it comes from. IMHO

John said...

Speed,

That claim is from the national level...the local release is more circumspect only citing "demand." :-) I think (hope?) that the local Cox leadership has learned that treating Lafayette's citizens as if they didn't understand the basics is counterproductive.

John said...

Hi Dane,

I agree, pretty much down the line. Yes, it is a win for the city--and the parish. Especially for the out-of-Lafayette City folks who get more bandwidth and pay less than those across the nation who will get it later. It's nice (and rare) to be both first and cheapest! (Though I do feel that they ought to split the credit for their good fortune between the two companies. ;-))

I also agree that the publicity will help cement Lafayette's tech reputation and that has to be a good thing too. Any city in our fair state can use all the good publicity it can get.

The info about the installation fee comes from the link to Broadband Reports story. Several Cox techs participated (one tech posted the story and others chimed in supporting him) That installation was $99 dollars came from one of them in the comments

Cheers.