US Internet is rolling out ultrafast Internet service in parts of Minneapolis and planning to push eastward with its high-speed, low-cost fiber network in the summer.
The Minnetonka firm that offers fiber-optic service to about 30,000 households in southwest Minneapolis announced Tuesday that it will use that network to offer 10-gigabit-per-pecond Internet speed, which is among the fastest Internet service available today. That's 400 times faster than the average download speed in Minnesota, 25 megabits per second, according to Ookla, an Internet diagnostic firm.
"The fastest Internet in the world is going to be here in Minneapolis starting this afternoon," said Joe Caldwell, co-CEO of US Internet. "We're talking about a game-changing speed."
The service will cost $400 per month, Caldwell said. The company already offers 1-gigabit-per-second service for $65 per month to the same 30,000 households west of Interstate 35W, and plans to expand its network east of 35W, mostly to neighborhoods south of Lake Street.
"This coming summer, if you're east of 35W, you will be able to get fiber from us," Caldwell said. "Not everybody, but big parts of the city."
By moving eastward with its fiber network's high speeds and lower prices, the upstart US Internet hopes to take business away from Comcast. First it must bury fiber-optic cable next to sidewalks in dozens of neighborhoods around the city. The smaller firm recently dropped the price on its 1-gigabit service from $114 per month to $65 per month.
Matt Vogt, an IT professional who works from his home in Uptown, switched from Comcast to US Internet in May and has since convinced several neighbors to make the switch.
"I'm extremely happy with it," he said.
US Internet won't get the awareness from consumers that Comcast enjoys for a while, Vogt said, but its service is compelling.
"US Internet can't beat Xfinity and Comcast's advertising dollars," he said. "It'll be more word of mouth."
Comcast charges $77 per month for 50-megabit-per-second service and $67 per month for 25-megabit-per-second service.
US Internet offers 100-megabit service, roughly the speed of the Internet at many people's offices, for $45 per month, Caldwell said. That's the most popular plan for the company. Only a "couple thousand" households in southwest Minneapolis pay for the 1-gigabit service, and the group willing to pay $400 per month for 10 gigs will be smaller still.
The firm has a little over 10,000 fiber network customers paying for various speeds, and all of them are west of Interstate 35W. After expanding east of 35W, Caldwell hopes to extend the service to the bulk of the metro area within I-494/694 by 2020.
Officials at Comcast are watching the latest move from US Internet closely.
"We compete in an aggressive marketplace every day. We've increased our speeds 13 times in 12 years, and we make our products available to the entire community, not just a few neighborhoods," said Mary Beth Schubert, a spokeswoman for Comcast.
Caldwell was joined Tuesday for the announcement by Minneapolis Council Member Andrew Johnson and the city's chief information officer, Otto Doll.
While 10-gigabit-per-second Internet may have applications in the future — particularly in telemedicine — it won't be necessary for most customers, Doll said.
"A lot of folks really don't need it," he said.
But US Internet's 1-gigabit and 100-megabit services have attracted customers, Doll said, and he expects the firm's expansion across the southern tier of the city to move forward in 2015.
"In pretty wide swaths of the city, the business case is there," he said.
US Internet is also in the wireless Internet business. The firm has wireless customers all over Minneapolis — about 21,000 — and is in the sixth year of a 10-year contract to provide wireless Internet to the city of Minneapolis through its subsidiary, USI Wireless.
Caldwell admits that customers have not been as happy with the wireless as they have with the fiber network. The two businesses, however, are separate.