Google (GOOG 0.57%) is getting exactly what it wanted out of the Google Fiber project.
- Consumers all over America are demanding faster, better, cheaper Internet services.
- Incumbent local networking monopolies improve their services and lower prices just to stay relevant.
- And in some places, city and state governments are jumping on the high-speed bandwagon.
Baltimore just provided a fine example of all three of these Google Fiber side effects.
The Maryland metropolis spent a year and millions of dollars to bring Google Fiber's gigabit network into town. Billionaire finance guru George Soros supported the city's bid, for crying out loud. It was a data-driven campaign with serious financial backing, and helped by the fact that Baltimore owns cable conduits throughout the city -- a rare advantage.
Google picked the twin Kansas Cities instead, later expanding into Austin, Texas, and Provo, Utah. Baltimore was left at the altar, ringless.
But Baltimore never gave up on the high-speed data dream.
Image source: Google Fiber.
The city just hired consulting firm Magellan Advisors to work up "a range of options" for covering Baltimore in low-cost but high-speed fiber optic services.
Comcast (CMCSA 0.43%) has an exclusive cable contract in Baltimore. The cable giant faces no real competition for TV and broadband services here, being protected by a long-term mandate from local government. The company does face off against telephone giant Verizon (VZ +0.15%), which offers fiber-based FiOS services in many parts of the city. But even so, FiOS isn't available everywhere and a citywide network with official support could make a real difference here.
Importantly, the Comcast agreement expires at the end of 2016 after a 12-year run. The cable guys are free to improve their Baltimore services to the level of Google Fiber and beyond -- or the city could build its own gigabit network.
Cable networks can indeed keep up with fiber installations in many ways. The new DOCSIS 3.0 standard can in fact deliver gigabit speeds to the consumer via plain old coaxial cable runs. Intel has proven this point at industry trade shows, and coax expert Arris can show you even faster solutions. Even Comcast itself has demonstrated gigabit cable-based technologies.
If nothing else, Baltimore might inspire Comcast to get a move on with its DOCSIS 3.0 rollout -- at service levels and prices that the average Maryland consumer could stomach.
Keep in mind that Google Fiber offers low-grade broadband services for free in Kansas City, or gigabit speeds at just $70 a month. Force Comcast to meet that standard in Baltimore, and other cable markets will want the same treatment.
And that's how Google wins. Big G doesn't need to become a nationwide ISP, but it collects more revenue every time you make Internet use faster, cheaper, better, and easier for the average consumer. Google Fiber is getting that job done in a big way.
