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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

June 24, 2013 at 12:35 PM

Gigabit Seattle pricing revealed — less than Comcast, more than Google

The first broadband provider piggybacking on Seattle’s government network announced today that it will charge $80 per month for the ultrafast service it will begin offering in pockets of the city this fall.

That’s $10 per month more than Google charges for gigabit broadband services that it offers in Kansas City, but $25 less than what Comcast charges for its fastest residential service in the Seattle area.

Meanwhile at least one of Seattle’s current broadband providers is responding aggressively to the new competition. CondoInternet, which has offered ultrafast broadband in the area since 2009, is lowering its prices below those of Gigabit Squared and Google in the next week or two.

Seattle spent nearly a decade studying ways to bring ultrafast broadband to everyone in the city, using the city-owned network as a foundation. But that plan was abandoned last year by Mayor Mike McGinn. Instead, he decided to parcel out portions of the city network to private companies, an approach that basically ends any chance of Seattle developing a citywide, municipal broadband network.

Cities across the state and country have experimented with municipal broadband services offering alternatives to established providers that have been slow to upgrade their networks. About 8 to 9 percent of U.S. homes now have fiber-optic broadband service, mostly provided by Verizon, according to the Fiber to the Home Council trade group.

Long before Google jumped into the business in 2010, and while Seattle hemmed and hawed, the Grant County Public Utility District in Eastern Washington went ahead and added fiber-optic broadband to its infrastructure. People in the Moses Lake area can get ultrafast broadband for $45 per month.

Private competitors have also surfaced. In Seattle, CondoInternet has been providing gigabit-speed broadband since 2009 and now reaches 10,000 housing units in the area, serving apartments and condos. It’s expanding to additional neighborhoods including Ballard, where it will begin service by the end of summer, said John Van Oppen, chief executive of parent company Spectrum Networks.

Seattle’s partnership with Washington, D.C.-based Gigabit Squared was announced in December by McGinn. Gigabit’s initial plan was to offer broadband services in portions of 12 neighborhoods. The service area has since expanded to 14 neighborhoods, shown here in green.

fiber

Gigabit’s initial plan was to have its fiber-optic service pass by 6,000 to 10,000 home; however, only about 10 percent of those homes are expected to connect. The company expected to be serving less than 1 percent of the city initially.

Spokesman Matt Weinland said the company plans to reach “close to 75,000 homes.” That would be roughly a quarter of Seattle’s 280,000 homes.

Pricing wasn’t disclosed until today.

Gigabit announced three tiers of service, which are structured similar to Google’s offerings in Kansas City but priced slightly higher. The prices also undercut Seattle’s existing broadband providers.

The signature gigabit service — with download speeds up to 1,000 megabits (or 1 gigabit) per second — will cost $80 per month. Installation costs $350, but the charge is waived for customers signing a one-year contract.

Gigabit will offer 100 Mbps service for $45 per month, plus the $350 installation charge that’s waived with a year-long contract.

The company also is offering a barebones service with no monthly charge for 60 months, but the $350 installation fee applies. Over five years the installation fee works out to $5.83 per month.

The lowest tier of service offers download speeds up to 5 Mbps and uploads up to 1 Mbps. That’s far slower than modern cellphone networks, but it’s fast enough for email, browsing and other basic Web usage.

Gigabit will announce a sign-up process next month. Interest received will help the company prioritize its rollout schedule. It hasn’t yet released its prices for business customers or multifamily buildings where it will offer wireless service, instead of wired connections.

For comparison, Google charges $70 per month for gigabit service in Kansas City and waives its $300 installation fee.

Seattle-based CondoInternet charges $120 per month for gigabit service with no installation charges or contract requirements. It also charges $60 per month for 100 Mbps service.

But Van Oppen said he’s preparing to move to a flat rate of $60 for gigabit service, which may be the nation’s best deal on broadband. About half of the buildings served by CondoInternet have wiring that can support that speed, he said.

Van Oppen said the aggressive pricing is necessary to overcome the hype and publicity around Gigabit Squared.

“They get so much press for a complete vaporware product,” he said, noting that CondoInternet already reaches more homes than Gigabit Squared will in the first phase of its rollout.

“It’s really a battle right now for mindshare – for some reason we’re losing against a product that doesn’t exist,” he added.

The mayor’s office is a factor in the battle. It’s promoting Gigabit Squared as if it’s the only game in town. “We’re one step closer to bringing gigabit speed broadband to Seattle,” McGinn said in Gigabit Squared’s press release today.

CondoInternet considered using city infrastructure to reach Ballard. But it ended up using its own cabling because the city assets weren’t worth the effort required. “They’re preferentially giving them all to Gig Squared,” Van Oppen said.

Comcast charges $105 per month for 105 Mbps services. The company cut prices and increased speeds in March.

Gigabit’s offering could pressure Comcast to offer even faster or cheaper service, though Gigabit isn’t reaching enough homes yet to pose a major challenge to the Philadelphia-based cable giant.

Comcast declined to comment on future pricing but spokesman Steve Kipp issued a statement saying it’s “investing millions of dollars a year” to maintain and improve its Seattle area broadband network.

“The result is that today we provide speeds of up to 105 Mbps to all of our customers and offer scalable metro Ethernet services up to 10 Gbps to businesses as we continue to push fiber optic lines closer to homes,” he said via email.

 

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