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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.
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!
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.
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.
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...
Governments don't create cable monopolies. Once there's one network there, there's too little profit, and requires too big of capital investments, to be profitable. It's called a "natural monopoly" and being ignorant of the economic realities that cause it, will make your alternate universe political theory fail miserably in the real world.
Now then, governments have options to shift the power torwards competition.
They can offer incentives for competitors to build a parallel network... which is what Google Fiber depends on.
They can nationalize and/or regulate the natural monopolies, so that they can be forced to keep prices low and improvements coming, in exchange for their rights to run their lines through private and public property.
They can seperate the last-mile provider from the service provider, perhaps requring the former to be a non-profit.
But notice that the unregulated free market doing it's own thing isn't one of those scenarios. Not only does deregulation make for less competition and worse service, but without the government doing the eminent domain thing, and leasing space on power poles, no cable company would ever be able to cover a city profitably. There will ALWAYS be holdouts, and everybody will be looking to get an unfairly large chunk of fees from the big company that wants to bury cables on their land.
Slashdot gets worse every day... Pipedot: News for nerds, without the corporate slant
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.