Google Fiber: Why Traditional ISPs Are Officially On Notice

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A few years ago, when Google was determining which city to launch its pilot Google Fiber program, cities all over the country went all-out trying to persuade the search giant to bring all that fantastical bandwidth to their neck of the woods. And with good reason: Google Fiber offers gigabit Internet speeds and even TV service, all at prices that meet or beat the competition. In fact, the lowest tier of Google Fiber service (5Mbps down, 1Mbps up) is free once users pay a $300 construction fee.

Eventually, Kansas City was the lucky locale chosen for the Google Fiber launch, and by all accounts things are going swimmingly, and Google is slowly but surely rolling out service to nearby areas, including Mission Woods, Westwood, and Westwood Hills. This week, Google announced that Austin, Texas was the next area to get the Google Fiber treatment.

Austin

If ISPs were concerned before, they should really start sweating it now. Although Google Fiber looked like it would whip traditional ISPs in every regard--indeed, Time Warner Cable allegedly cut prices and boosted speeds for some users in Kansas City in a desperate attempt to keep them as customers--surely ISPs were hoping the pilot program would flame out. Now that Austin is happening, it’s clear that it’s only a matter of time before Google rolls out its service in many more cities.

Further, this jump from piddly Internet speeds to gigabit-class service is not just about people wanting to download movies faster; it’s a sea change in what the Internet is capable of, and the world is craving bandwidth.

For example, video chat is emerging as a powerful means of communication, be it between relatives living on separate coasts, business associates working on a project in different locations, or doctors diagnosing patients from across the world. Currently, even the best connections are relatively low-res, with terrible latency and frequent drops or lags. Imagine a world where all of the above is streamed over a gigabit connection capable of clear and consistent sound and images that can also handle pertinent content such as audio or video streams; it’s a game changer, and that’s just a single use case. Imagine what could be developed in the fields of scientific research, medicine, and education.

KU School of Medicine

More exciting is the fact that there are use cases nobody has thought of yet, because Internet speeds have been so a tight bottleneck. This is akin to the shift from from horse and buggy to the automobile; once cars became affordable for most Americans, the whole country changed dramatically.

A byproduct of Google Fiber invading previously secured space is that ISPs have to adapt their current services to survive. There are two ways that will happen; one is that they’ll have to deeply slash prices on lower tiers of Internet service (and probably bundle some value-adds, to boot), which will be a boon for customers who currently can’t afford broadband. The other is that the competition will have to roll out commensurate services (i.e., gigabit Internet). In fact, that’s already happening; AT&T just announced that it too is planning to build a gigabit fiber network in Austin.

Another reason ISPs have to fear Google Fiber is that Google is a company rolling in money from a wide variety of sources, which means that it can invest heavily in new infrastructure without risking the farm, so to speak. Further, unlike Search, which is a free service that Google has to pay for with ads, the company is charging money for (most of) its Google Fiber services; it’s a self-sustaining business, which should allow Google to build out faster without investing as much money generated from other sources.

Google Fiber package
Complete Google Fiber package

Yes, continued rollouts of Google Fiber will take time--a lot of time--and naysayers will point out that building all that infrastructure is a near impossibility, but Google is really good at doing impossible things to scale. For example, this is a company that is busily mapping the entire world, one picture and satellite image at a time.

For that matter, people said the same thing about the railroads. And electrical grids. And telephone lines. And so on. ISPs better get cracking on some competitive solutions quickly, or they’ll just be another dot in the history of Internet communications.
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altereDad replied on Thu, Apr 11 2013 5:14 PM

Gotta consider moving.

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I have a few things to ask/say about this..

1, Why is it that all the non-city places are getting this first? I'm not saying Kansas City is not a city.. But you would think New York City, Miami, Philadelphia, Seattle, etc.. Here we see Kansas and Texas of all places?

(I may hail from the northeast..but I live in Pennsyltucky..lol)

2, Why a rainbow Rabbit? WHY? What? Is the Rainbow Rabbit supposed to eat the rainbow Apple?

3, Of course it isn't only about faster streaming/torrents/porn/gaming etc. Computers themselves and the technology behind them is getting faster aswell.. And then you have the countries whose main food staple is rice have 5-20X's faster internet than the U.S... Supposed to be moving forward..not backwards..and I don't know about you? But I've about had it knowing all of that and paying $60+++per month for my 50mbps down/10mbps up connection where those in said locales pay about 20 u.s. dollars every 3 months for 500mbps downstream access.. For what? to play starcraft 1 of course.. >_<

I'm glad Google is doing this.. I hope they spread like the plague...

The Cable isp's are charging too much because they can..service is stable yes..but it is ridiculously overpriced. (100mbps down connection = $120-200/month in my area via cable)

Then you got the phone companies with DSL..sure...$20/month

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$20/month for 5mbps/down..then they hit you with taxes and it turns into $50/month..had this happen to me last year..my relationship with verizon ended on a sour note there..Then again? They have FIOS which sounds awesome..until you find out you have to live within walking distance of their offices...

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Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

I may be a bit bias, because I *love* Google.

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Johnny3D replied on Thu, Apr 11 2013 6:04 PM

I hope Google brings fiber to my area. I'll dump my Charter account faster than they could blink. Here in Michigan, generally the cable/ISP providers get a monopoly in an area. So your choice is limited to one company who always overcharges. Would be nice to have an alternative and some serious competition.

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If you want great Internet, you have to pay through your nose for a business line. Google Fiber is what Internet infrastructure should be, right now. They are the only ones willing to invest.

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ajm531 replied on Fri, Apr 12 2013 12:27 AM

in answer to your first question the only thing i can think that could answer that is maybe considering this is a brand new thing a smaller(in comparison to new york) city would probably be financially more sound in case it failed as opposed to spending oodles of money in a huge city like new york. Sure it could be done but again if it failed so many resources would have been wasted again as opposed to covering a relatively big but smaller city than kansas city. Im sure there are still other cities but since you nor i are google and we are not building a gigabit network the world may never know why or how they are planning this. AS for your second question ummmmmmmmmm... I guess as the recent meme says Deal with it?(maybe? :/ and i say that in a confused way not a mean way or rude way).

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Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

In any case I can't wait for this service to hit California!

Google. <3

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ajm531 replied on Fri, Apr 12 2013 12:30 AM

really really really hope this comes to san antonio as quickly as possible

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Clixxer replied on Fri, Apr 12 2013 2:30 AM

ChuckRenninger:

I have a few things to ask/say about this..

1, Why is it that all the non-city places are getting this first? I'm not saying Kansas City is not a city.. But you would think New York City, Miami, Philadelphia, Seattle, etc.. Here we see Kansas and Texas of all places?

(I may hail from the northeast..but I live in Pennsyltucky..lol)

Google went to KC because it was cheap. As the article said they didn't bet the whole farm on Google Fiber but the guys over at Google didn't get to where they are without some good business sense. Now you ask why is it cheaper? 

KC and Austin for one are not HUGE cities that would take a long time to deploy the network in. Secondly and the more important reason is the existing infrastructure that is in place. Both KC and Austin have most utilies (electrical, cable, phone) on poles to the tune of 85-90%. I used to be a tech with Time Warner and was asked to transfer to Austin but decided against it because I didn't want to climb a pole all day everyday along with other reason but that was a big one. All the city does is have to give them permits ect to hang their network on the poles which while not as nice looking is a hell of alot cheaper than either leasing space from companies such as AT&T or Verizon to put their stuff underground or they would have to do their own digging and that can add up quickly. Now this relates to the first reason is that New York amoung other cities as far as I know have alot if not most of their infrastucture underground and so Google would have to go their first and then retrofit their services into existing apartments, building, ect which could also at this point in time be to much money to invest to justify.

CraigSeamons1:

Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

I may be a bit bias, because I *love* Google.

Really? Post the same thing 3 times?

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I agree with the overall feel of the comments above, I hope this takes off, moreover I hope it hops the border and comes up north as well... I know I will be happy to plunk my money down for it. As a matter of fact where do I sign I will spend right now.

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This is so awesome. Google is doing some great things. I certainly hope this puts other ISP's on edge and encourage's them to step up their game and either slash their prices and or increase their speed. I like my ISP here in Phoenix, Cox, but I pay a lot for my broadband. And their really the only game in town. The other ISP, Century Link, doesn't have speed i want. Google needs to get to Phoenix. Lol

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This is the first step (Not Really) of busting bandwidth caps and making the isp's that offer all services (video,internet,phone) well .. take over targets. what better way to roll out across the USA faster then ...well is possible. Simple . easy . and shread .. just like Motorola . I sold all my Time Warner stock :) sorry but they have a old school unsustainable business model .

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First off, they picked Kansas City because we're freaking awesome over here. Second of all, they did it because as previous poster said, they could easily go aerial with their infrastructure rather than spend years boring underground.

I'm glad they're giving the traditional ISPs a run for their money. Those black hearted businessmen at Comcast, Time Warner and the phone companies have had a sweet,sweet ride for the last decades exerting near monopolistic control over the communications market in thousands of areas nationwide. Their infrastructure already paid off decades ago and now they're just sucking the teet of the desperate consumer.

Competition is a good thing. When Verizon got the iPhone, people left AT&T in droves and like Matt over at the Oatmeal so eloquently put it about AT&T, the iPhone and mass migration from the company:

"I'm sorry for treating you like a discarded cat turd for all those years. Please stay with me and only meeeeee!!!!"

http://theoatmeal.com/pl/state_web_winter/iphone_verizon

I will enjoy every moment Time Warner, Comcast and its ilk suffer.

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Clixxer replied on Fri, Apr 12 2013 11:44 PM

Whats funny also is since Google is not a traditional cable or phone company, they can go wherever cities want them. If say Dallas did not want to give them rights to poles and stuff because of AT&T and TWC then they will just go elsewhere. They aren't separated by territories like Verizon and AT&T are because they are a Telco company. That is something should be interesting how it plays out when Google starts encroaching on both of their territories in the same city.

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First off it's Google ...............they have a plan ... Money .. And ..the best people in the world . google is going to win

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Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

I may be a bit bias, because I *love* Google.

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Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

I may be a bit bias, because I *love* Google.

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Clixxer replied on Sat, Apr 13 2013 1:36 AM

CraigSeamons1:

Chuck, the answer to your second question is:

The rabbit I assume is for speed and the color scheme is that of their logo. Pull up google on your web browser; see the resemblance?

I also agree with your post(s). It's about time the USA got faster speed for an affordable price. I don't see how ISPs can compete with Google.

I may be a bit bias, because I *love* Google.

and #5.

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This is really interesting. Google is doing what the U.S. FCC fails to do - roll out a serious competitor. However the FCC still has a role in all this. All broadband even wireless broadband should be classified as common carrier. It isn't at the moment but the likes of Comcast, Cox, at&t et al are less likely to go after a company like Google than they are against a real upstart.

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St Louis K replied on Sat, Apr 13 2013 11:06 AM

You always test market new products in the most typical and average metro areas that you can find that have no bias toward or away from your product. That's how you get good results so you know that when you roll out your product to other areas it will sell.

Utilizing a test market strategy also minimize the financial risks by only building enough capacity to serve your test market. Once you know the product you have will sell, you're then good to invest more to roll it out to the national market or expand into other markets while gradually ramping up production until you have completed your expansion.

KC is a pretty average midwestern city that is just large enough to have a real urban core. It has urban, suburban, and exurban areas in a comparatively compact area compared to New York or the other cities you mention. It, and Austin too could be considered microcosms of urban areas. Austin probably has a serious pro-google bias so it probably wasn't the best place to roll this out first if you wanted to get an unbiased reaction to your service.

Also, when you roll out a completely new product or service, you want to roll out small and shake out the bugs in your production or delivery system before you try it in a larger market. From that point of view KC is pretty much version 1.0. Austin will probably be 1.1, or maybe 1.3.

So all in all, Google is doing what smart business people always do. Start small. Figure it out. Expand. Lather, rinse, repeat.

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JohnReagan replied on Sat, Apr 13 2013 11:56 AM

From what I recall, Google had some basic guidelines as to which community would receive the Google Fiber, which included a large enough tech savvy population and an area not too big and not too small. I'm betting financial support from the city factored in as well.

As to "I'm glad Google is doing this.. I hope they spread like the plague..." ..Me too. What people don;t know is our govt split up the marketplace between the big ISPs and provided financial incentives with the understanding that they would build out this type of service..Naturally once the deal was done the large ISPs (Comcast, AT&T, Suddenlink etc....) ignored their part of the deal. That's what happens in a Plutocracy.

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Versifier replied on Sat, Apr 13 2013 11:18 PM

Would be nice if they'd come to Canada. Sadly will never happen

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The ISPs have cause to be worried. Back in the 90s Congres appropriated something like $200 billion for the national telecom companies to lay down fiber all over the country. They took the money, but as usual Congress forgot to include any mechanism for checking whether they actually did what they were paid to do so they didn't. Now the U.S. has rather poor internet compared to most other countries. Here in Thailand, which has been very slow to give up its monopoly profits and crony capitalist bribes and perks, I now get 5 Mbps (512 kbps upload) for the equivalent of about $20/month, and I live far from Bangkok, the only city in Thailand. I've heard that both Japan and Korea have 50MBps for about $50 a month. Europe is not quite as good, but better than U.S.

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rapid1 replied on Sun, Apr 14 2013 9:08 AM

I think altereDad makes the generally biggest statement about this relatively, and the reason I say this is because of many things, first take into account that the internet is changing the economy which I think that although not the primary reason of the economic picture for the last 10 years especially in smaller developing countries, it has impacted the economy to greater and greater amounts in the more developed economies year after year in a ever rising amount.

Now the attraction of a city can be raised or lowered by the fact that this level of service is available in a city or even as a future based projection. As far as it goes Austin is a very attractive one as well with all the advantages it already has educationally, industrially, and within the arts (IE: South by SW just to name one massive festival which draws thousands yearly) now it will have Gigabit Fiber internet which I also imagine will end up rolling out faster than projected for several reasons in Austin than it did in KC.

My point though is this if it raises the attractiveness of a city and therefore in the long run the local economy it strengthens said location immensely in many other ways as well for a person a family a corporation as well as in many other ways generally. Over the long haul it can also add to the future life of a city with this level of service and therefore add to the fall of others changing geography when speaking in terms of residential population.

I also sincerely question companies such as AT&T who are doing this now after another massive entity has started. They particularly should be on the forefront of this especially in larger metropolitan areas and already have something in place, not be considering it in an area Google has already announced will be done by them. To cap that off I would pay $300.00 for direct Fiber to home and then ever after free internet at this amount of bandwidth any day as a consumer not to mention some TV thrown in as a bonus. Hell I would do it even if I had a monthly bill after a period of time and do it without question as well!

So considering this as a communications Giant is ridiculous think about how much success they would have if Uverse was Fiber to home rather than a Fiber line from a main street over copper to a residence in circumference as it is now. They would own the market again without question but there considering it.

RogerAMerritt also makes a great point about this. Add on the fact that in some smaller residential areas in places in South Carolina and other states they got some of that money and set up local broad band providers. Then the local politicians while being paid off by entities like Comcast, Verizon, Time Warner, and Charter made it almost impossible for them to do so financially, and were being paid off immensely by said large market players to do so.

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Hopefully this will make all the ISP smarten the heck up, and start realizing that they are charging far too much for far too little.

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Clixxer replied on Sun, Apr 14 2013 8:05 PM

rapid1:

I also sincerely question companies such as AT&T who are doing this now after another massive entity has started. They particularly should be on the forefront of this especially in larger metropolitan areas and already have something in place, not be considering it in an area Google has already announced will be done by them. To cap that off I would pay $300.00 for direct Fiber to home and then ever after free internet at this amount of bandwidth any day as a consumer not to mention some TV thrown in as a bonus. Hell I would do it even if I had a monthly bill after a period of time and do it without question as well!

So considering this as a communications Giant is ridiculous think about how much success they would have if Uverse was Fiber to home rather than a Fiber line from a main street over copper to a residence in circumference as it is now. They would own the market again without question but there considering it.

Yeah I agree they would have the market if they would run fiber to the house. They laid copper lines a long time ago and continue to do maintenance on them. Even though they are worth billions, it would cost billions and billions to run fiber to the homes instead of what they have been getting away with is just a massive truck line to neighborhoods. I'm not defending them really other than just putting it out there. Verizon has completely stopped expanding due to running out of money to lay a 100% fiber network since they went into cities and towns where everything went underground. New neighborhoods are easy to lay fiber underground but old neighborhoods, old buildings, ect are alot harder to do anything in.Google understands this problem and it will be curious to see when they try their hand in an area is that is all underground to see what the cost will be vs on the poles.

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ez460 replied on Sun, Apr 14 2013 10:48 PM

Google is going to win big with this on both the consumer and commercial level!

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