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[August 05, 2014]
CenturyLink plans broader fiber rollout, gigabit speeds, in Portland neighborhoods [The Oregonian, Portland, Ore. :: ]
(Oregonian (Portland, OR) Via Acquire Media NewsEdge) Aug. 05--Portland residents, long starved for high-speed Internet and cable TV options, may suddenly have a full menu of choices.
CenturyLink announced early Tuesday morning that it plans a broad rollout of fiber-optic service to Portland through next year, bringing ultra-fast "gigabit" service to select neighborhoods across the city.
At the same time, CenturyLink is negotiating a new video franchise with the city that could enable it to offer cable TV in the near future.
CenturyLink's upgrade comes as Google Fiber contemplates its own rollout across the metro area, offering fiber-optic gigabit service and a cable TV option. Together, they present a formidable challenge to Comcast, the city's dominant cable and residential Internet company for more than a decade.
Unlike Comcast, though, CenturyLink and Google Fiber won't serve the whole city. They'll pick neighborhoods where demand is greatest, and they have the best chance of recouping the huge cost of their network upgrade (the city estimates Google's investment would total $300 million), potentially leaving parts of Portland behind.
The competition isn't driving down prices, at least not yet. CenturyLink's discounted, introductory rate for its gigabit service is actually $10 higher than Google Fiber's standard, $70 a month price. (A gigabit is 1,000 megabits per second, roughly 100 times a typical broadband connection today.) Instead, the three companies are offering variations on each other's plans, collectively giving subscribers a multitude of options.
"We all have different philosophies in the way we roll it out," said Chris Denzin, CenturyLink's general manager for the Portland area.
While Google Fiber offers a single, flat-rate, $70 a month for its gigabit service, CenturyLink will offer three different residential fiber tiers -- 40 megabits per second up to a full gig. CenturyLink's prices range from $30 a month up to $150, depending on speed and whether customers subscribe to other services, too.
Google's pricing and marketing strategy, which involves neighborhood "fiber rallies" to qualify for service, reflect its status as a new arrival, according to Denzin.
"When you have no market share you have a very different approach," he said. "You build the hype. You build the buzz." Whether it's hype or marketing savvy, Google is a master at attracting attention. Its fiber pricing is tailored for subscribers who want straightforward, top-end service. CenturyLink's pricing, like Comcast's, is more complicated, targeted toward consumers willing to give up some speed in exchange for a better price.
"We've chosen to offer a hybrid approach," Denzin said. "We'd like to have an offering available to everyone to meet their individual need." The resulting competition, if Google comes through, will put each company's strategy to the test -- and could give subscribers a variety of options and some real bargaining power to play one company off another, at least initially.
CenturyLink isn't disclosing which areas have access to its fiber, where it plans to expand, or how much of the city it ultimately plans to serve. The company says it's keeping its plans to itself for fear of alerting the competition, but will notify eligible customers with door hangers and mailings. (Online reports suggest the rollout has begun in parts of inner Southeast Portland.) CenturyLink has been dabbling in residential fiber for a few years, and service is already available in a handful of homes, apartments and condos. The broader residential rollout, announced Tuesday in Portland and nine other cities, including Seattle, reflect the company's push to move beyond its legacy landline phone business.
(Vancouver is not part of the broader rollout. For now, at least, CenturyLink says it will only string fiber to new, "greenfield" developments in Vancouver.) The Louisiana-based company came to Oregon in 2011 when it bought Qwest Communications, then the state's largest phone company. Landline phones have been in precipitous decline in Oregon as elsewhere -- CenturyLink had just 600,000 phone lines statewide at the end of 2012, less than half the number Qwest had a decade earlier. (See the graph at the bottom of this article.) So CenturyLink has aggressively added business services, providing enterprise-class Internet connections and cloud computing. In addition to residential fiber, CenturyLink said Tuesday that it plans a push to make fiber more available to smaller businesses beyond the Portland's downtown core.
The drive toward fiber reflects the Internet's growing role in every day life for web surfing, games, radio, music streaming -- and especially for video. Denzin, for example, has 14 Internet-enabled devices in his home -- video streaming boxes, laptops, tablets and smartphones used by various members of his family.
Few people need gigabit service today, because there are few online services that can accommodate speeds that fast. But the proliferation of gadgets throughout the home put ever-growing demands on home Internet connections and will eventually compel consumers to upgrade speeds and capacity.
As CenturyLink builds out its fiber, it's evidently contemplating cable TV, too. In December the company quietly received a two-year extension on a Portland cable TV franchise it inherited from Qwest, and is now negotiating its own, 10-year agreement.
CenturyLink offers an Internet-based cable TV service called Prism in 12 other markets and appears to be eying Portland, too, capitalizing on the capabilities of its nascent fiber network.
"It would be great to have some real competition," said Mary Beth Henry, director of Portland's Office for Community Technology, who is negotiating with CenturyLink on the new franchise.
When Portland approved a broadband franchise for Google Fiber in June, the city agreed to eliminate several of the conditions that Comcast is required to fulfill. Among those: Google doesn't pay a 3 percent "PEG" fee to support public access and governmental programming, and Google doesn't have to serve the whole city.
Similar terms would be available to CenturyLink or any other prospective broadband provider, according to Henry, in the interests of attracting more broadband options to the city.
"I'm being very encouraging of them," she said, "because I think it'd be great for Portland to have more competition." Google Fiber offers a cable TV service to its Internet subscribers for an additional $50. CenturyLink isn't saying whether it plans to do so in Portland, but is hinting strongly in that direction.
"I'd say: Stay tuned," Denzin said.
-- Mike Rogoway; twitter: @rogoway; 503-294-7699 ___ (c)2014 The Oregonian (Portland, Ore.) Visit The Oregonian (Portland, Ore.) at www.oregonian.com Distributed by MCT Information Services
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