Earlier this week, Cablevision announced Optimum Online Ultra, a new high-speed Internet product that uses the DOCSIS 3.0 standard to deliver speeds up to 101 Mbps. This is very exciting news, especially when you connect this announcement to the cable operators who have deployed wideband service over the past year – Comcast, Charter and Cox – and those that are planning to deploy in 2009.

And that might be all there is to say about it, but there was a little twist. Our friends over at Verizon seemed really unhappy about the launch. Was it the 101 Mbps that bothered them or the $99 monthly price? At any rate, take a look at this odd post on the Verizon Policy blog.

Besides arguing against the business model for their own FiOS deployment, you’ll note that one of their key complaints is that Cablevision’s 101 Mbps is a “parlor trick” because “there is little evidence of market demand for the speed.” This echoes a PCMag.com argument (referenced in this blog post) that higher speeds are unnecessary: “…no average consumer is going to pony up almost $100 for home broadband service—regardless of speed.”

Now, I’m a little confused here. I seem to remember all these arguments over the past couple years (sarcasm alert) about how horrible it was that consumers in Europe and Asia had so much more bandwidth, while we Americans had to struggle along with our anemic speeds. And now we’re told, “Bah, who really needs that much bandwidth?”

Secondly, Verizon pulls out the long-disproven accusation that cable broadband service is shared bandwidth and so it’s not real. Well, I hate to break it to the fine folks at Verizon, but all bandwidth is shared at some point, even at FiOS. Yes, cable broadband is engineered differently than FiOS is. Cable started deploying modem service about 15 years ago and the intention was always that customers would share bandwidth off a node, but that nodes could be split as needs increased.

Verizon issues a clarion call against “parlor tricks.” Here’s a neat trick for you: If you’re a FiOS customer, with its “all-fiber” service, take a look at the back of your TV or at your modem. You’ll find a piece of coaxial cable, making it a hybrid fiber-coax system. So, wasn’t “fiber optics right to the door, true QAM” a bit of marketing? Especially in light of the fact that cable has generally built its broadband customer base and high penetrations while offering its best services and fastest speeds to the homes passed by its network, while Verizon focuses attention on FiOS’ fast speeds but still offers copper-based DSL service across most of its footprint.

Add the fact that Verizon says that Cablevision “claims” they deployed the service across their footprint (when a Cablevision spokesman confirmed that the service will be available across their service area on May 11) and you get the idea.

But this is competition in action. When Verizon thought they had the edge, they bragged pretty loudly. Some blogs, such as GigaOM and CrunchGear, noted that Verizon seems to be protesting a little too much this time.

[Ed. Note: This is in response to a post on Verizon's Policy Blog, by Tom Tauke.]

Tom, I have great respect for you but your blog this morning was a little over the top.

“Thwart consumer choice?” C’mon, Tom. This is really about Verizon trying to thwart competition . . . again.

Here is what is really going on. For the first time in history, Verizon’s entrenched incumbent position in the phone marketplace is being challenged successfully by cable competitors providing digital phone service, a relatively new marketplace development that gives consumers more choice, better value, and — according to J.D. Power and Associates — provides consumers greater satisfaction in every region of the United States. Not to put too fine a point on it: Verizon is losing customers.

Naturally, you’ll do everything you can to retain them. I get that. But, the law is very clear: Verizon can market to its heart’s content 362 days of the year to its customers. However, when customers make a decision to leave you, you are obligated to honor their decision to request that their phone number be transferred to their new provider, and respect their privacy by porting their current number within 4 days without harassing them with marketing retention calls. Congress, on a bipartisan basis, and the FCC have previously recognized that integrity in the number porting process is essential for true competition to flourish.

You are right that this is about consumer choice . . . but when consumers have made a choice, they deserve to have their choice implemented. That’s why there are rules preventing you from undermining that choice by invading their privacy.

You also call this an “intriguing” development. You refer of course to a decision that has not yet been announced (although there have been press reports). I agree that it is “intriguing.” First, this is a rare “restricted” proceeding. That means no one is supposed to speak to anyone at the FCC about this proceeding unless all parties to the complaint are present. It’s “intriguing” that someone in the FCC apparently leaked a decision that apparently goes against Verizon. And it is “intriguing” that the leak was apparently choreographed in a way that gives Verizon a shot at debating this in the press and the blogs.

One solution we should all agree on is to reduce the “porting interval” – the period of time it takes to shift a phone number from the losing provider to the winning provider, regardless of whether it is a shift from a phone provider to a cable provider or the other way around. That’s what consumers really want and deserve. And, the temptation for mischief is reduced. I invite you to work with us to ensure the FCC actually makes a decision soon to shorten the ridiculously long 4 days that consumers are forced to tolerate for simply making a choice in favor of the competition.

One other thing: you make the usual “apples to oranges” argument that because cable is engaged in win-back marketing when a cable video customer decides to switch to FIOS service, Verizon should be able to market during the porting interval for phone service. Oh, and you also throw in the same old tired refrain of “rising cable prices.” Are you really unaware that Verizon’s video service is priced about the same as cable providers? Did you miss the press release where Verizon announced perhaps the greatest video price hikes in the country last year? And, of course, what you also leave out is that a FIOS customer won’t cancel service until Verizon has already wired up the house and is ready to turn on (or has turned on) the service. So, it’s a done deal at that point. Of course the cable company may try to win back the customer. But it’s not doing it with inside information.

Intriguing? You bet.