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TheStreet Open House

Verizon Boosts FiOS Internet Speeds Which Cable Can't Match

Stocks in this article: VZNFLXCMCSA

NEW YORK (TheStreet) -- In the midset of its battle with Netflix (NFLX), Verizon Communications (VZ) is boosting the ultimate FiOS speeds it offers its customers.

Verizon will soon provide data upload speeds equaling download speeds on almost all of its FiOS connections. The new symmetrical speeds offerings mean subscribers will be able  to send photos, videos and music as well as back-up all their files at the same speed they receive information over the Internet. The company claims its new upload speeds should help customers like eBay shoppers and online gamers.

New FiOS subscribers will get the upgrade beginning today while current customers will notice the change in the coming months.

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Verizon shares were off 0.16% to $50.67 in midday trading in New York.

Technologically, Verizon is able to offer symmetrical service because of its nearly all-fiber network. Cable was originally designed to bring video into homes not vice versa. Currently, cable upload speeds top out around 35 megabits per second. Fiber is much faster but most customers usually care more about download connection speeds.

In addition to upload speed increases downloads are getting a boost too. The cheapest FiOS service plan used to offer 15 megabits downloads and 5 megabits up. The same plan now offers 25 megabits in both directions, allowing files to upload to the Internet in one-fifth the time they normally do. Other new plans offer 50, 75 up to 500 megabits and are usually bundled with television and/or phone service. Verizon has more than 6 million FiOS Internet customers.

When reached by phone, Sanford Bernstein analyst Paul deSa said he believes Verizon's new symmetrical plans are fine for consumers but they might not be the primary target. He thinks the new upload limits will be more advantageous for businesses that will usually make more use of the ability to handle higher upload speeds.

Companies rely on Verizon to be their Internet service providers too. So, with all this speed boosting capabilities you would think Verizon would be universally hailed as technological heroes. But the battle over whether Verizon offers super-fast connections to each and every site on the Internet rages on.

Netflix pays Verizon (and also Comcast (CMCSA)) to insure higher-quality bandwidth speeds to deliver its services to customers. But Netflix has been accusing Verizon of not living-up to its end of the bargain. Verizon claims Netflix is deliberately causing the slowdown. One FiOS customer decided to find out for himself who was at fault.

Colin Nederkoorn, co-founder and CEO of Customer.io tested his Netflix connection via FiOS and found the video service was being received at 375kbps or less than 1% of the speed he was paying for.

Then he routed his Netflix connection through a third-party VPN (virtual private network) connection and measured his Netflix service being received at 3,000-5,000kbps and higher. To say that he's disappointed and upset with Verizon is an understatement. Last month, the Federal Communications Commission announced they would be investigating the situation to determine "whether consumers are being harmed."

Gerard Halloran of Janco Partners blames the problem both companies are facing on the government and its idea of net neutrality. In a telephone interview he said "the Internet is dominated by creative people with capital. Verizon has the capital but Netflix is creative. Without government interference both sides would find a way to be amicable and solve the issue."

Verizon is scheduled to announce second quarter earnings on Tuesday. Analysts surveyed by Thomson Reuters expect the company to report earnings per share of 90 cents on $31.12 billion in revenue.

-- Written by Gary Krakow in New York.

To submit a news tip, send an email to tips@thestreet.com.

 

Gary Krakow is TheStreet's Senior Technology Correspondent.

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