Cox Communications has announced that the company is now offering faster, DOCSIS 3.0 based service to businesses and residential customers in Connecticut. That of course includes the company’s fastest Ultimate Internet tier, which offers 50 Mbps downstream (55 Mbps when Powerboost kicks in) and 5 Mbps upstream for $99 a month. According to the Cox press release, the tier comes with three unique IP addresses, 10 e-mail addresses, and 50 hours per month of remote dial access (that last one being something you’ll enjoy for less than a month, since Cox is killing off backup dial-up starting in September).

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Last week AT&T posted their second quarter earnings, and while wireless connectivity was hot, the company noted they lost a whopping 347,000 traditional DSL customers on the quarter. Some of those customers upgraded to AT&T U-Verse, but many of them were users in un-upgraded AT&T markets who migrated to cable, either lured by faster broadband speeds or the cable triple play. To try and fight back in legacy areas, AT&T’s again tinkering with their DSL pricing, their website indicating that they’ve brought back the $14.95 per month price point for their Basic (768/384 kbps), Express (1.5 Mbps/ 384 kbps) and Pro (3 Mbps/ 512 kbps) DSL tiers, which are all starting to look very long in the tooth, especially upstream. The company’s Elite (6 Mbps / 512 kbps) tier is now $19.95. All of these deals are for new customers, and the pricing is for twelve months before you need to negotiate a better deal.

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Earlier this month, AT&T users in many markets suddenly found themselves with crippled upstream speeds with some users unable to even exceed 50 kbps. AT&T quickly responded to the complaints, noting that they’d found a software defect in Alcatel-Lucent equipment (which isn’t in all markets). While an AT&T statement at the time claimed AT&T was “providing normal 3G uplink speeds and consistent performance,” that wasn’t really the case; users spent most of this month dealing with these crippled speeds.

But based on a tests this morning in the NY/NJ area, it looks like AT&T’s finally deploying a software patch. No comment yet from AT&T if they have a timeline for all impacted markets.

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Bernie Arnason over at Telecompetitor makes the argument that with DOCSIS 3.0 relatively inexpensive to quickly deploy (75 million Americans should have it by the end of the year) and many telcos clinging to aging copper last mile connectivity, the cable industry should have it pretty good competitively over the next few years. Comcast added more broadband customers (608K) in the last two quarters than AT&T, Verizon, and Qwest combined (401K), and cable’s triple play continues to gobble up fleeing copper landline customers. Cable also dominates more than 90% of the VoIP market.

Cable’s traditional weak spot – upstream bandwidth, looks to get some help later this year as cable operators perfect upstream channel bonding. Comcast recently noted that they’re seeing 75 to 100 Mbps upstream in tests. While Verizon’s decision to spend $23 billion on FTTH to the home puts them in a decent position for now, there’s a huge swath of America served by telcos using aging copper infrastructure that many of these companies can’t afford to upgrade to fiber. DOCSIS 3.0 means telcos will up their game somehow:

It all adds up to this perfect competitive storm analogy I referred to early on. This storm compels the telcos who haven’t already done so to respond, primarily with FTTH. Good customer service, local presence, and a solid DSL product are very admirable and noble. But these storm clouds may demand much more.

Can Qwest seriously compete with DOCSIS 3.0 with no money for serious upgrades? Marketing that pretends last mile copper is FTTH can only go so far. When does AT&T decide to stop waiting on VDSL bonding and pony up the cash for the move to FTTH? 3-7 Mbps is the fastest speed offered by Verizon in roughly half of its broadband territories. Luckily for most carriers, they’ll be sheltered from the “perfect competitive storm” Arnason mentions by the simple fact that many of their markets don’t see decent competition. When you’re the only game in town (be it cable, telco, satellite or carrier pigeon), you get to charge whatever you’d like for last-generation service.

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Ask and ye shall receive. Windstream has confirmed that the company has raised the upstream speed of their DSL tiers. Windstream says they’re responding to a request by users who found 386 kbps to be a little dated for 2009. Both the company’s 3 Mbps and 6 Mbps tiers have seen the upstream side of the equation nudged from 384 kbps to 768 kbps at no additional price.

The upgrades apparently started in early November and will be ongoing through December – so if you haven’t seen them yet readers can apparently nudge Windstream to get the upgrade now.

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[ Related: Windstream Acquires NuVox ]