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Comcast (CMCSA) to Ramp Up Broadband Speeds in 9 States

T VZ CMCSA CTL

Trades from $3

American cable behemoth Comcast Corp. (CMCSA - Free Report) announced plans to boost its broadband speeds in nine states where its DOCCSIS 3.1 technology is yet to be deployed. The states include Washington, Oregon, Utah, Colorado, New Mexico, Arizona (Tucson), Minnesota, Texas (Houston) and Missouri (Kansas City). The speed upgrade will increase the bandwidth to up to 200 Mbps and will be free for its customers. Comcast will then gradually introduce its DICSIS 3.1 system in these regions.

DOCSIS 3.1 Deployment

The cable behemoth started rolling out the DOCSIS 3.1 service in Atlanta this March. Upgrading to the new DOCSIS 3.1 will allow Comcast to compete effectively against AT&T Inc.’s (T - Free Report) ongoing Fiber-to-the-Home (FTTH) program.

DOCSIS 3.1 versus DOCSIS 3.0

DOCSIS (Data Over Cable Service Interface Specification) is a communications protocol that allows cable multi service operators (MSOs) to provide high-speed broadband connections. This technology was specifically designed for the cable TV industry, which has been for long struggling to enter the high-speed wireless and fiber-based wireline space. The current DOCSIS 3.0 technology has helped cable TV operators gain an edge in the high-speed Internet market. Additionally, DOCSIS 3.1 comes with several operational benefits. The technology is also backward compatible, allowing the present hybrid fiber-coaxial cable lines to allow such high Internet speed by simply switching to a DOCSIS 3.1 compatible modem. Although FTTH has the advantage of providing unlimited bandwidth, backward compatibility is a major advantage for DOCSIS 3.1, which allows cable MSOs like Comcast to provide high-speed Gigabit broadband to customers, without having to incur additional digging or other cable laying costs unlike FTTH providers. This is sure to boost margins for companies like Comcast.

The Bottom Line

Recently, increased cord cutting has put pressure on the pay TV industry, compelling them to look for revenue generation alternatives. Broadband Internet has now become a key focus area for cable MSOs like Comcast. It is a no-brainer that a high speed and stable broadband offering will help the company retain customers. Also, Comcast’s host of other Internet-based services such as Internet TV is vital for growth. However, the company is likely to face competition from peers like CenturyLink Inc. (CTL - Free Report) and wireless service providers like Verizon Communications Inc. (VZ - Free Report) who have already begun 5G network trials.

Comcast presently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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