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That Was Fast: Google Fiber Puts More Pressure on the Cable Guys

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I got a fresh upgrade offer from my ISP, Verizon (NYSE: VZ  ) FiOS, yesterday. It's not a bad deal, really. For $10 more per month, I could upgrade my 15 megabit-per-second Internet connection to a 50-megabit account. As Verizon puts it, "Because you're doing more online than ever, you need more speed than ever." OK, I'm convinced. Pay 15% more for a total of $75 a month, but my connection speed would more than triple.

Or, you know, I could just move to Kansas City. There, I would sign up for Google (NASDAQ: GOOGL  ) Fiber at $70 per month, and enjoy a full gigabit of online bandwidth goodness. That's nearly 67 times my current bandwidth for $5 more, or 20 times the upgraded Verizon offer for $5 less. How's that for "more speed than ever," or a superior value?

Can you hear me now? Good.
You can bet that service providers are starting to feel the heat from Google's hyper-competitive plans. Big G started slow, taking nearly three years to move from announcement to the first connections in Kansas City, but it has picked up the pace dramatically. Austin, Texas, got the nod for Fiber services last week, and now the service is jumping to Provo, Utah, as well.

The streets of Provo are about to light up with high-speed fiber-optics. Photo from Provo City's official website.

The situation in Provo is unique. Google is rolling out its own fiber-optic cables in Kansas City (in both Kansas and Missouri) and Austin, but Provo already has a citywide fiber network. Google can simply step in, upgrade the iProvo fiber mesh to gigabit speeds, and start managing the service. The company promises to connect every home and business along the current fiber backbone routes.

Thanks to the existing infrastructure, Google can offer absolutely free 5-megabit connections for a mere $30 one-time connection fee and will give gigabit hookups to a handful of worthy recipients such as schools, hospitals, and libraries. There's no word yet on what gigabit accounts will cost for everyone else in Provo, or indeed in Austin, but chances are that it will be comparable to the Kansas City service.

Why not sell this everywhere?
There's very little technical reason Verizon's fiber couldn't offer gigabit speeds to consumers well below the magic $100 monthly price barrier. Some new connection cards on the ISP's side, maybe a quick connection box in my garage (or perhaps just a software update done from the central office), and I'd be good to go.

Verizon does have a 300-megabit service available, which is at least in the same ZIP code as Google's high-speed plan. But I'll note that Google's connection is high-speed both ways, while Verizon's fastest plan caps upload speeds at 65 megabits -- and I'd have to pay $210 a month for Verizon's most competitive plan.

Google is showing the ISP industry how it's done. One can only hope that Verizon feels Big G's pressure and takes action to make its own services faster, cheaper, and more competitive. I'll note that Google has cherry-picked fiber communities that don't have FiOS options.

After that, there's no reason cable companies shouldn't follow suit. Granted, coaxial cables don't offer quite the turbo oomph of a proper fiber connection, but the platform can still be competitive with the right back-office equipment. Comcast (NASDAQ: CMCSA  ) offers 100-megabit plans to business customers, for example (with 10-megabit uploads, natch). But you do pay through the nose for these deals -- $370 a month for the top Comcast plan.

Looking ahead
Google Fiber may not be a cash cow for Google, but the project does accomplish a greater goal for the company. Google wins when more consumers get their hands on faster and more ubiquitous Internet connections. If the fiber project manages to spark some competitive fires in a dangerously stagnant and often anti-competitive ISP market, then it's a job well done -- even if the service never reaches New York City or my native Tampa.

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Read/Post Comments (5) | Recommend This Article (6)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 22, 2013, at 1:12 AM, emailnodata wrote:

    You know what everyone is waiting on, correct??

    Full control of what constitutes "cable" now??? No more paying for "the johnson grass network" and "boll weevils gone wild" or whatever. Pay for what you use, only.

    Google's gigabyte network would, I think, easily enable the that functionality. Ultimately, if regulators step out, this could end cable companies and dish companies monopolies. as content filters. We, the consumer, would dial in what we want, where we want, and on any device we want.

    Long story?? Beginning of the end for cable, and a downsizing of dish.

  • Report this Comment On April 22, 2013, at 1:16 AM, KennnyF wrote:

    I'm glad to see someone finally give the market more competition and hopefully, more choices. Where I live, the choices for wired broadband are either TWC or AT+T which is not real fiber. AT+T uses the existing copper wires to connect the fiber to each house. It's slower than TWC cable modem. You have to purchase the equipment and sign a two year contract. Verizon FIOS is simply not available and they aren't going to expand any more.

    Any wireless broadband from the cell providers in our area is too unreliable or it has data caps, which is impractical for streaming.

    This entire country is falling behind and the service has stayed the same or gotten worse. The USA is now 28th in internet speed. We should be #1.

  • Report this Comment On April 22, 2013, at 1:27 AM, Changnoi32 wrote:

    At present data is segregated into voice, TV, text messages, MMS (multi-media messages), etc.

    There is no reason for this when everything is simply data. Soon it will all merge.

    Remember "long distance calls?" That racket dried up pretty quick didn't it, abeit a long time ago.

  • Report this Comment On April 22, 2013, at 5:30 AM, youngjedi81 wrote:

    Cable is in no danger. Unlike these guys my provider who already gives fast speed recently upgraded there speed by triple but charged zero for the new boost. Plus they give tv and phone to boot.

  • Report this Comment On April 25, 2013, at 2:25 PM, redtide1 wrote:

    Well..gone are the Y2k days.. No more PC's ...they are going the same way that,, PC did to the typewriter..

    So all the school and certifications us nerdy folk have must now be replaced...At no cost ,of course, to the PC nerds of the world..(yeah,right).... But alas my dear readers ...Linux will previal....<<<nerdy hint...just look at your handhelds...those apps are not ,, Mr. Microsoft.. my friend....So reboot to linux and start writing your "own" apps for mobile systems...Use that old cranky,, wattage eating PC for something productive...Create and populate virtual apps for mobile systems....with linux...<<backbone of this new developing phase of electronic wonders..

    So long Mr Mario and solitaire will never be the same i press send on my mobile phone,, have a gnome day....

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