Beware of broadband speed overkill

Cable operators and phone companies are increasing speeds of their broadband service, but the average consumer may not need the boost.

Today's high-speed Internet access packages may sound tempting, but consumers should think long and hard about how much broadband they actually need before they ante up.

Certainly, Internet users switching from a 56Kbps (kilobits per second) dial-up connection to any flavor of broadband can immediately see what they were missing.

But it can be a different story when making the leap into premium services. Though data-intensive utilities like high-definition video could one day place a heavy burden on the Net pipes into the average consumer's home, some analysts say many current Internet users don't even come close to using all the bandwidth that's offered to them in a standard broadband service.

"Unless you live with five Internet addicts, it's hard to come up with a use case for some of these high-end bandwidth packages," said Joe Laszlo, an analyst with JupiterResearch. "The cable operators are trying to keep up with Verizon's Fios service, and they can't look like the slowest guy on the block."

Laszlo's reality check comes as cable operators and telephone companies compete to offer the fastest, most expansive broadband service around.

The company with the network to beat appears to be Verizon Communications, which is extending fiber directly to homes to carry a triple play of services including high-speed Internet access, television and telephone service. It currently offers three tiers in its Fios service: 5Mbps (megabits per second) downstream/2Mbps upstream for $34.95 per month; 15Mbps/2Mbps for $44.95; and 30 Mbps/5mbps for $179.95.

In March, Comcast, the nation's largest cable operator, doubled download speeds of its fastest broadband service in four cities to 16Mbps for downloads and 1Mbps for uploads at a cost of $52.95 per month. It offers 8Mbps downloads in the rest of its territory.

Cablevision, which also competes with Verizon, offers consumers two tiers of service: 15Mbps/1Mbps for $49.95 or 30Mbps/2Mbps for $64.95.

Time Warner has also jacked up the speeds of its service. In certain areas of the East Coast it offers a 7Mbps/384Kbps package for $39.95. In other Time Warner regions, users get 5Mbps/384Kbps for $39.95.

Of course, it's not all a speed competition. Though consumers may not yet need all that broadband, carriers argue that customers tend to make their buying decisions based on speed.

"There is a small fraction of the population that always wants more, but most people are happy with what they have."
--Joe Laszlo, Jupiter Research analyst

"If you look at what is happening in Europe and Asia, where they have more advanced services than we do here in the U.S., you see that whoever wins the broadband war in terms of the highest speeds has the highest penetration and leads in market share," said John Schommer, director of Fios product management for Verizon.

Cable operators and phone companies also justify boosting speeds (and sometimes prices) by pointing to all the new multimedia applications people are using. They say their customers need more bandwidth to listen to music, watch videos and play games on the Internet.

But JupiterResearch's Laszlo said most of the services that tout faster speeds are overkill for the majority of broadband users today because the multimedia applications that consumers use only consume a fraction of the available bandwidth.

For example, a good quality video streamed from CNN.com, Comedy Central's MotherLoad or even CNET's own site only takes up between 500Kbps and 600Kbps worth of bandwidth. Streaming audio consumes even less bandwidth. A service such as Real's Rhapsody music player, which offers near CD-quality sound, uses about 128Kbps to 256Kbps. Then there is Internet telephony, which only uses about 56Kbps.

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