Is Faster Access to the Internet Needed?

When it comes to Internet access, is there such a thing as too fast? That's a question U.S. Internet providers are grappling with as they place strategic bets on whether or not to upgrade their networks to offer high-priced, superhigh-speed Web connections. A growing number of households served by certain Internet providers -- notably Verizon Communications Inc. and Comcast Corp. -- are being offered Internet services that are 25 times faster than the average broadband speed in the U.S. But those who live in areas served by other Internet providers, including AT&T Inc. and Time Warner Cable Inc., will have to make do with much less for some time. Cable operators don't have to spend as much to boost speeds. Comcast is using a technology developed by an industry group to inexpensively tie together several pipes it uses to shuttle data to customers into one big virtual pipe in order to deliver the higher speeds. This technology, known as Docsis 3.0, won't require Comcast to rebuild its network to boost speeds. The philosophical divide will have big consequences for the camp that gets it wrong. If customers end up flocking to the superfast connections, Time Warner Cable and AT&T will be caught flat-footed without a high-end offering. And not only is broadband service the highest-margin service sold by phone and cable companies, it opens the door for providers to sell both TV and phone service. That could be an issue in markets where consumers have a choice of an ultrafast connection or a fast, but not as speedy, service. Time Warner Cable and AT&T overlap with either Verizon or Comcast in a substantial portion of their markets.
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