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The Mere Promise of Google Fiber Sends Rivals Scrambling
Hugh Pickens DOT Com (2995471) writes "Marguerite Reardon writes at Cnet that within a week of Google's declaration last spring that it planned to build a fiber network in the city of Austin, AT&T announced its own Austin fiber network and in less than a year's time, AT&T and local cable operator Grande Communications have beaten Google to market with their own ultra-high speed services using newly built fiber networks. AT&T maintains it has been planning this fiber upgrade for a long time, and that Google's announcement didn't affect the timing of its network but Rondella Hawkins, the telecommunications and regulatory affairs officer for the city of Austin, said she had never heard about AT&T's plans before Google's news came out. Hawkins was part of the original committee that put together Austin's application to become the first Google Fiber city. 'Our application for Google would have been a good tip-off to the incumbents that we were eager as a community to get fiber built,' says Hawkins. 'But we never heard from them. Until Google announced that it was going to deploy a fiber network in Austin, I was unaware of AT&T's plans to roll out gigabit fiber to the home.' Grande Communications' CEO Matt Murphy admits that without Google in the market, his company wouldn't have moved so aggressively on offering gigabit speeds. It also wouldn't be offering its service at the modest price of $65 a month, considering that the average broadband download speed sold in the US is between 20Mbps and 25Mbps for about $45 to $50 a month.
It's not surprising, then, that in every city in AT&T's 22-state footprint where Google is considering deploying fiber, AT&T also plans to bring GigaPower. That's a total of 14 markets, including Austin, the Triangle region of North Carolina, and Atlanta, home to AT&T's mobility division. While AT&T refuses to acknowledge that its gigabit fiber plans are answering the competitive challenge posed by Google Fiber, others say that Kansas City may have been a wake-up call. 'I think all the providers have learned some valuable lessons from Google's Kansas City deployment,' says Julie Huls, president and CEO of the Austin Technology Council. 'What Google did instead was say, "We're going to build you a Lamborghini, but price it at the same price as a Camry,"' says Blair Levin. 'And that's what's so disruptive about it.'"
It's not surprising, then, that in every city in AT&T's 22-state footprint where Google is considering deploying fiber, AT&T also plans to bring GigaPower. That's a total of 14 markets, including Austin, the Triangle region of North Carolina, and Atlanta, home to AT&T's mobility division. While AT&T refuses to acknowledge that its gigabit fiber plans are answering the competitive challenge posed by Google Fiber, others say that Kansas City may have been a wake-up call. 'I think all the providers have learned some valuable lessons from Google's Kansas City deployment,' says Julie Huls, president and CEO of the Austin Technology Council. 'What Google did instead was say, "We're going to build you a Lamborghini, but price it at the same price as a Camry,"' says Blair Levin. 'And that's what's so disruptive about it.'"
Who would have thought that competition is good for progress...
Oh, so competition causes companies to be competitive, who knew.
It is almost as if capitalism only works if you punish cartels and break up monopolies.
When Google Fiber comes to a city and gigabit internet is finally advertised, is it truly gigabit internet or is there massive throttling involved? I've had fiber to my door in Romania (for a little over 10€/month) for many years now, and while upload speeds are somewhat slower than download speeds, you can torrent hundreds of gigabytes a month and no one at the ISP bats an eye. Do Americans get the same goodness, or do the advertised specs come with a boatload of catches?
AT&T : we're gona build you a Camry but sell it for the price of a Lamborghini, just because we know that we're the only dealership you can buy cars from, and only when another dealership moves in, we're going to get you that Lamborghini.
Or perhaps Google are selling a Camry at the price of a Camry, and the other guys who've been peddling Model Ts are now having to get competitive!
In Soviet Russia, all our base are belong to YOU!
Oh, you mean competition is a good thing and monopolies are bad?
ISPs in the US don't seem to have *real* competition in the majority of locations. It's amazing what happens when *real* competition comes to the market.
When Google Fiber comes to a city and gigabit internet is finally advertised, is it truly gigabit internet or is there massive throttling involved? I've had fiber to my door in Romania (for a little over 10€/month) for many years now, and while upload speeds are somewhat slower than download speeds, you can torrent hundreds of gigabytes a month and no one at the ISP bats an eye. Do Americans get the same goodness, or do the advertised specs come with a boatload of catches?
When you have gigabit speed being delivered to the consumer, bottlenecks tend to point at the other end.
It is literally going to start depending on the rest of the infrastructure, and likely how well your hosting provider is peered. Yet another reason net neutrality is such a critical issue. Gonna be a bitch if we finally get killer speed in our homes at a reasonable price only to find we haven't paid the internet gateway thugs enough to get to our damn content.
Say what you want about Google but I'd always turn to them before the likes of AT&T, Verizon, etc. I just with Google would come to where I live.
Given that pretty much every telco and ISP of any size is a known collaborator in surveillance and is either working on, or actively engaged in, commercial exploitation of customer data (only with their trusted partner companies, of course...), and their speeds are low and their prices are high, it's pretty hard not to root for Google.
Sure, they aren't exactly warm and cuddly; but if you get a dystopian panopticon either way, it might as well at least be fast and reasonably priced.
...and it's almost as if you only find actual monopolies in places where the government intentionally creates them in the first place.
You know, like all of the cable and data monopolies in the US.
So, what we learn is that ISPs believe they can build a gigabit infrastructure and make a profit charging only $65/month for service without having to subsidize it with an ad business (like Google can). That's a very nice measure of just how much the rest of us are getting screwed by our ISPs.
One small detail to add to AT&T side of the story - their GigaPower package is only a name - THAT offering tops out at 300Mbps, and this is true for every city it's available in. Not only that, no one has a clue if they'll every make 1,000Gbps service available in any market.
Sorry AT&T, calling it a trout a whale does not make it a whale no matter how big you blow up the picture you took of the trout.
"Courage is being afraid to do the Right Thing, and doing it anyway."
The cynical side of this, is that this is AT&T and Co. are making sure that Google doesn't make any money with Fiber by making sure the market size for Fiber is drastically reduced wherever its rolled out...and discouraging Google from pursuing this as a business. JMHO...
So they all announced upgrades here in Austin: Google first, then AT&T Uverse, and now TWC. But. Nothing has really changed. Everyone has announcements, but the coverage areas are so small and nothing has changed. TWC has made the best annoucment that their 300Mbps service will be available all over Austin, but not yet. They have offered some date in the future that I'm sure will be delayed. So competition works, but no one is really being that aggressive.
I think its fun to watch a company that built its fortune on tiny margins move into a industry that has enormous customer hostile margins.
You have that backwards. Google's net margins are 50% higher than AT&Ts and double Comcast's.
Google has a net profit margin of 21.5%. AT&T has a net profit margin of 14.1%. Comcast has net profit margins around 10.5%.
Google is going to fucking destroy the big ISPs everywhere they go.
And your evidence for this is what exactly? While it would make me very happy to see more competition, I seriously doubt Google is going to push AT&T, Verizon and Comcast out of their current monopolies on any sort of widespread basis.
Google doesn't necessarily care who provides the fast internet service to it's online customers.
Yes the do because the ISP who controls the connection to the end users can seriously mess with Google's business. Think about why Google developed Android. Google is an advertising company but if they can't control or influence the devices that actually touch the people they are trying to advertise to then handset makers and telecoms can shut them out or at least badly hurt Google's margins in exchange for access to eyeballs. And it wasn't just the ISPs either. Apple, Microsoft/Nokia and others could have basically refused to carry Google advertising and/or substituted their own. Same problem with ISPs to homes. It's potentially an existential threat to Google unless Google can find ways to make the ISPs play nice.
I think Google is rolling out some fiber networks in a few areas to provide a credible threat to AT&T, Verizon and Comcast to hopefully force them to behave. Sort of a doomsday weapon which they hope to never need to use. Google is one of the few companies that has the cash to seriously consider rolling out their own network if they were forced to. In fact I could even see them conceivably partnering with Apple and Microsoft on this if the need arose. This would hurt Google's margins rather badly (running an ISP is expensive) but it is an option.
TELECOMS have a monopoly on COPPER PHONE LINES. It has nothing to do with internet.
Really? Because I could have sworn I got access to the internet over those very copper cables. If you have to go through a monopoly to get access to the internet then it is a distinction without a difference.
And you could always get a phone via VOIP or Cellular.
Which requires either those same copper phone lines (AT&T, Verizon, Comcast, TimeWarner or Charter) or wireless access through AT&T, Verizon, TMobile or Sprint. Which oligopoly would you like to use today?
Whatever advantage the telecoms had was gone at the turn of the century.
If that were actually true then we would see hundreds of telecoms rather than the local monopolies/duopolies enjoyed by most of the country.
Please just mention you're coming to Denver, would love to see how Comcass and CenturyLunk react.