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Jim Hu

Staff Writer, CNET

Comcast will raise its broadband Internet speeds by at least a third later this year–part of its effort to fend off DSL rivals.

With Baby Bell local phone providers making inroads with cheaper but slower DSL service, Comcast and other cable companies hope to fight on speed rather than price. Comcast’s faster service, added at no extra cost to customers, will begin rolling out this quarter, the company announced on Sunday.

As previously reported, the nation’s largest cable and broadband provider’s current download speed of up to 3mbps (megabits per second) will jump to 4mbps. Upload rates of 256kbps (kilobits per second) will reach 384kbps, the company said. Customers of Comcast’s more expensive 4mbps service will see a 50 percent increase to 6mbps downstream and 768kbps upstream.

Speed has been of the essence to the nation’s major cable providers. Time Warner Cable said in December that it would raise its basic download speed to 5mbps from 3mbps. Months earlier, Cox Communications said it would raise its speed limit from 3mbps to 4mbps. Faster speeds may help justify cable subscriptions that average $45 a month when the Bells sell DSL–which typically clocks in at 1.5mbps–for as low as $26.95 a month.

Broadband has become the central battleground between cable and the Bells. So far, the Bells lag in overall broadband market share, with about 40 percent to cable’s 60 percent. Comcast remains the largest broadband provider with 6.5 million subscribers. In the intense fight for one another’s customers, each side is packaging other services, such as video and voice, into its broadband bundles.

Comcast, for example, recently announced plans to sell phone service over Internet lines–voice over Internet Protocol, or VoIP–a step into the Bells’ territory.

As it has hiked speeds, Comcast has been giving customers more to do with that bandwidth. Its home page has become more of a media portal, with emphasis on higher-bandwidth services such as video news clips, on-demand video games, a flashier interface and more personalization tools.

Last year, Comcast began letting subscribers send 45-second video clips, or up to 10 digital photos with audio narration, in their e-mail messages. To promote these features, the company sent coupons for free Web cams to new subscribers and offered discounts to existing customers.

Comcast this year is expected to introduce more of these higher-bandwidth services. Earlier this week, the company said it will launch its own instant messenger service, which will support live video streaming over Web cams. Instant messaging is one of the most popular applications on the Internet, but it is dominated by America Online, MSN and Yahoo.

Comcast said it will also expand its online music service, refurbish parts of its home page and improve its various content channels, such as fantasy sports, kids and gaming.