A new arms race in Internet access may soon be underway.
RCN Corp. has begun offering superfast 1 gigabit-per-second Internet service to 18 communities around Boston, and will extend it to seven city neighborhoods later this spring. Priced at $69.99 a month, it will be the fastest offering from a local provider after a super-speed service from Comcast Corp. that costs many times more.
How fast is 1-gigabit-per-second? Enough to stream up to 200 high-definition movies simultaneously. That’s far more than the typical household would likely need, but RCN general manager Jeff Carlson said consumers’ need to move data faster is only growing.
“We see the demand climbing year after year,” said Carlson. “We see people with more high-speed devices operating in the home. We see gamers wanting a better experience.”
Internet search titan Google pioneered the 1-gigabit service with the launch of its Google Fiber project in 2010, in cities such as Nashville, Kansas City, and Salt Lake City. Google charges $70 a month for the service.
Google launched its fiber network in a bid to force traditional telecom companies to offer faster Internet service at better prices. It worked. According to Recon Analytics analyst Roger Entner, average broadband prices fell $15 to $20 a month in cities served by Google Fiber. In addition, rival broadband companies began offering faster download speeds.
But unlike RCN and the major telecommunications companies, Google did not already have an installed network of wires and pipes, so it had to build its system from scratch. The immense cost of running fiber optic cable to thousands of homes and businesses led Google to back away from this approach last fall.
Meantime, Google acquired Webpass, a San Francisco company that uses wireless technology instead of cables to deliver high-speed Internet services to businesses and apartment buildings.
Brett Sappington, senior director of research at Parks Associates in Dallas, said RCN’s new service could speed the rollout of competing offerings from Boston’s other broadband providers, Comcast Corp. and Verizon Communications Inc.
“Where we see it emerging in markets we’ll often see competitors follow, because that’s a portion of their business they can’t afford to give up,” said Sappington. “The profit margins are so high.”
Verizon Communications offers speeds as high as 750 megabits for $150 per month.
The largest provider, Comcast, offers a 2-gigabit service called Gigabit Pro. But it’s only available to single-family homes, not apartments. The standard price for the service is $299.99 a month, though Comcast currently offers a promotional price of $149.99 for 24 months. In addition, installation of Gigabit Pro costs $500, because it requires a dedicated fiber optic line.
Comcast is currently upgrading its nationwide cable network to support one-gigabit service without the need to run dedicated fiber. This upgrade is due for completion in 2018, but the company hasn’t provided a date for finishing the work in Boston.