A new, refreshing development is beginning to ripple through the broadband world. We're finally seeing a glimmer of true competition -- and it's giving telecom giants the jitters.
When Google Fiber was first announced in 2012, Wall Street analysts dismissed the upstart, saying it would be prohibitively expensive to roll out new fiber nationwide. Four years later, the naysayers are singing a different tune.
It turns out Google doesn't necessarily need to build its own networks from scratch. In Provo, Utah, service is delivered over a network Google purchased from the city. In Atlanta, the company is taking a hybrid approach: both constructing its own network and using existing apartment building fiber. And in San Francisco, Google announced this week, the company will use existing fiber cables -- although it hasn't revealed whose -- to bring service to the city, thus avoiding the construction nuisances it's experienced in Austin, Texas.
San Francisco wasn't the only piggyback venture Google announced this week. Huntsville, Ala., also laid out the welcome mat to Google Fiber service, which will be provided over a network being built by city-owned Huntsville Utilities and leased to Google. City officials saw the network as "a low-risk investment, as compared to administering the gigabit Internet themselves, which would require a massive increase in personnel in an arena where they have limited expertise," a local news station reported.
The city boasts the highest concentration of engineers in the country, and Mayor Tommy Battle called fiber to the home "the Internet infrastructure for the 21st century. It is as vital to our quality of life as roads, water, sewer and electricity."
Christopher Mitchell, director of the Community Broadband Networks initiative at the Institute for Local Self-Reliance, called Google's partnership with Huntsville "game changing" and expects other cities to follow suit with investments in their own infrastructure to provide an alternative to local monopolies.
Google's deal with the city is not exclusive -- other ISPs will be free to lease the network -- but the tech giant still stands to benefit from the expansion.
"It would be a disadvantage not to have a monopoly -- if Google wanted a monopoly. But I think fundamentally Google doesn't want to make a lot of money on offering Internet access," Mitchell told Motherboard. "Google wants all Americans to have high-quality Internet access so it can sell us ads over it."
Many cities across the country have networks of fiber-optic cables laid that could be used for Internet connections. But most also have agreements with major telecoms that prohibit them from using it to provide connections to homes. Cities usually agree to this, Motherboard says, because the telecom companies agree to provide free or cheap connections to municipal offices in exchange for exclusivity. They have also successfully lobbied in 19 states to put laws on the books that erect barriers to the deployment of municipal broadband networks and stamp out competition.
But the tide could be turning. In Louisville, Ky., AT&T and Time Warner tried to prevent Google from using city-owned utility poles, arguing that Google Fiber installations could disrupt service for customers and would be in violation of union agreements. Despite their efforts, the city council last week unanimously decided to grant Google access.
If Google decides to provide service in Louisville, residents will likely see Time Warner and AT&T step up their timetables on plans to increase speeds in the area; also, prices will likely fall. Similar events transpired in Charlotte, N.C., after Google announced expansion plans there. Time Warner upgraded customers' Internet speeds from 50Mbps to 300Mbps at no additional cost. The same happened in Kansas City as well after Google entered that market.
It's amazing what a little competition can do.
With Google Fiber gearing up to enter the Atlanta market, Comcast has plastered the city with flyers urging residents: "Don't fall for the hype." Google Fiber will be offering its usual $70 gigabit Internet, and it also has unveiled a new $50 100Mbps option.
Unfortunately for Comcast, despite increasing its own speeds and a tempting offer of "9x more FREE TV shows and movies On Demand," Atlanta happens to be one of the many markets where the cable company has imposed usage caps and overage fees.
"For a lot of consumers the reaction will be, 'All this high speed but yet you're imposing data caps on me. It's pretty pointless,'" David Belson, an industry expert and editor of a quarterly state of the Internet report for Akamai, told TechDirt.
When you also factor in the cable company's dismal customer service record, is it any wonder users generally seem more excited about Google Fiber than Comcast?
"When you talk about the Google name and the resources they have, people perk up. Instant credibility is what it brings," said Provo Deputy Mayor Corey Norman. Since Google Fiber launched in Provo a little more than two years ago, the city has landed even more companies and is now starting to see it pay off in other ways. "When you have Forbes recognize you as the No. 1 place to live, No. 1 place to retire, No. 1 place to start a business," said Norman. "Google Fiber played a significant role in helping us get all of those recognitions."
Anthony Roderman, who works for a tech company and is a blogger out of Kansas City, Mo., says Google Fiber also helped that area grow. "It does bring businesses that are looking for those tech hubs to cities like Huntsville or Kansas City. They say if Google is paying attention to those cities, then maybe there is something there," Roderman told a local news station in Huntsville.
Google Fiber is currently offered in Kansas City, Provo, Atlanta, and Austin. Google has committed to rolling out services in seven more cities, including San Antonio, Texas, Raleigh-Durham, and Nashville. And the company is looking at 11 others, including Los Angeles, Chicago, Portland, San Diego, and Phoenix, as potential Fiber cities.
According to a recent analyst report:
If Google Fiber were to build out in Chicago and/or Los Angeles and their surroundings, it could precipitate increased interest from other major metro areas, making it easier for Fiber to scale up. Our high end estimate of 20-25 million homes passed by Google Fiber may prove less aggressive than we thought.
For the sake of increased competition in the broadband market, let's hope that prediction proves conservative.