Verizon (NYSE: VZ) has upgraded it fiber-to-the-home FiOS system so that it can offer download speeds of 150 megabits per second and uploads of 35 Mbps. The service will be offered to the 12.5 million people who have access to FiOS.
Verizon said that the new product would make emerging broadband applications available to the “mainstream” population. Among these advantages is that a customer can download a standard definition two-hour movie in 80 seconds. Whether that is important to consumers is open to debate
What is not debatable is that the service will cost a small fortune–$194.99 a month with a one-year FiOS subscription and Verizon wireline phone service. Cable companies have made inroads in the telecom market with their VoIP products for several years now. Verizon for some reason thinks a very expensive service will help them get some of that back
The new service may well be an offering without a market. It is hard to see why a consumer would pay over $2,000 a year when their current connection is fast enough for most applications they need.
The FCC supports faster broadband. The telecom industry does as well, if the service comes with a very high price and probably generates higher profits.
Consumers have already caught on to the reality that faster is not always better, particularly when speed has few advantages. Some cars go 150 MPH, but there is really nowhere to drive that fast. 150 Mbps is hardly useful to consumers who just want to play video games online, watch entertainment and news video and download pictures of their grandchildren.
Douglas A. McIntyre
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