Google Fiber Is a Growing Threat to Telecoms

Symmetric uploading and downloading from Verizon might sound nice, but it’s a common feature in fiber networks.

Aug 5, 2014 at 11:00AM

Google Fiber Network Box

A Google Fiber network box. Will you get one soon? Source: Google.

Verizon (NYSE:VZ) couldn't have been more hyperbolic in announcing symmetric Internet service for new FiOS customers last month. Symmetric connections allow users to upload data as fast as they download it.

"Faster upload speeds means better sharing experiences," said Mike Ritter, Verizon's chief marketing officer for consumer and mass business, in a press release. "As the Internet of Things becomes a reality, equal download and upload speeds will become essential."

Here, Verizon committed to offering a minimum 25 MB per second of symmetric bandwidth, up from 15 MB/second for downloading and 5 MB/second for uploading. For premium clients, the carrier promises up to 500 MB of symmetric service.

While that's sure to sound good to some, symmetric technology is neither new nor unique. Google (NASDAQ:GOOGL)(NASDAQ:GOOG) Fiber customers have enjoyed symmetric connections since day one of the services.

Fiber wars

Rewind to April 2012. More than 100 miles of Google Fiber lined the streets of Kansas City, Kansas, and Kansas City, Mo., every bit of it offering symmetric connectivity.

Google Fiber Diagram

A closer look at how Google Fiber works, circa 2012. Source: Google.

As the search star said at the time:

With most standard broadband connections, it is much faster to download a file than it is to upload one of the same size. That's because most of the bandwidth, or the network's capacity, is devoted to the content that users are trying to view online, such as their email or streaming video on sites like YouTube. But with Google Fiber, our users will be able to download and upload files at the exact same speed. Think about being able to upload that huge powerpoint presentation you made for work, or that video of your child's first steps in mere seconds!

Say what you will about the differences in style, Google and Verizon are pitching what would amount to identical services -- if Verizon were offering gigabit connectivity. Google Fiber is not only symmetric, but it's also 40 times faster for entry-level customers and twice as fast as Verizon's top-tier offering.

Cable comeuppance

So, if Google Fiber is already superior to what Verizon is pitching as an "upgrade," why make such a big deal out of the new FiOS speeds? I see two reasons.

First, Google Fiber is already in three cities and is in development in seven more. The company reports discussions with 34 cities in nine metro areas as of this writing. Every new deployment threatens existing broadband suppliers. That's why, in April, AT&T (NYSE:T) announced plans to expand its U-Verse TV service and GigaPower Internet to as many as 100 cities and municipalities.

Second, cable Internet is deeply flawed by comparison. Not only does cable lack symmetric service, but service slows as more users sign up, with each occupying a finite pool of shared bandwidth. Carriers can expand the pool, of course, but that generally requires significant capital investment. More often, they employ throttling and data caps to serve as many users as possible.

That's sure to leave some customers wanting. It's that group -- the ones that want faster speeds but who don't yet have access to Google Fiber -- Verizon is after. Wooing them with a bit of hyperbole is the least we should expect.

Tim Beyers is a member of the Motley Fool Rule Breakers stock-picking team and the Motley Fool Supernova Odyssey I mission. He owned shares of Google (A and C class) at the time of publication. Check out Tim's web home and portfolio holdings or connect with him on Google+Tumblr, or Twitter, where he goes by @milehighfool. You can also get his insights delivered directly to your RSS reader.

The Motley Fool recommends Google (A and C shares). The Motley Fool owns shares of Google (A and C class). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

4 in 5 Americans Are Ignoring Buffett's Warning

Don't be one of them.

Jun 12, 2015 at 5:01PM

Admitting fear is difficult.

So you can imagine how shocked I was to find out Warren Buffett recently told a select number of investors about the cutting-edge technology that's keeping him awake at night.

This past May, The Motley Fool sent 8 of its best stock analysts to Omaha, Nebraska to attend the Berkshire Hathaway annual shareholder meeting. CEO Warren Buffett and Vice Chairman Charlie Munger fielded questions for nearly 6 hours.
The catch was: Attendees weren't allowed to record any of it. No audio. No video. 

Our team of analysts wrote down every single word Buffett and Munger uttered. Over 16,000 words. But only two words stood out to me as I read the detailed transcript of the event: "Real threat."

That's how Buffett responded when asked about this emerging market that is already expected to be worth more than $2 trillion in the U.S. alone. Google has already put some of its best engineers behind the technology powering this trend. 

The amazing thing is, while Buffett may be nervous, the rest of us can invest in this new industry BEFORE the old money realizes what hit them.

KPMG advises we're "on the cusp of revolutionary change" coming much "sooner than you think."

Even one legendary MIT professor had to recant his position that the technology was "beyond the capability of computer science." (He recently confessed to The Wall Street Journal that he's now a believer and amazed "how quickly this technology caught on.")

Yet according to one J.D. Power and Associates survey, only 1 in 5 Americans are even interested in this technology, much less ready to invest in it. Needless to say, you haven't missed your window of opportunity. 

Think about how many amazing technologies you've watched soar to new heights while you kick yourself thinking, "I knew about that technology before everyone was talking about it, but I just sat on my hands." 

Don't let that happen again. This time, it should be your family telling you, "I can't believe you knew about and invested in that technology so early on."

That's why I hope you take just a few minutes to access the exclusive research our team of analysts has put together on this industry and the one stock positioned to capitalize on this major shift.

Click here to learn about this incredible technology before Buffett stops being scared and starts buying!

David Hanson owns shares of Berkshire Hathaway and American Express. The Motley Fool recommends and owns shares of Berkshire Hathaway, Google, and Coca-Cola.We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

©1995-2014 The Motley Fool. All rights reserved. | Privacy/Legal Information

Compare Brokers