Various executives at Alphabet's (NASDAQ:GOOG) (NASDAQ:GOOGL) Google, before the parent company was created, often talked about its technology efforts as being designed to "inspire the partner ecosystem."
In theory, what was once Google (and its various divisions) pushed the envelope with its tablets, phones, and other gadgets in order to force its partners to take the lead. The search giant would show what was possible and other companies would take up the mantle expanding the reach of Chrome, Android, and the Google Play store.
Fiber, which is now a separate division with its own CEO under the Alphabet umbrella, has served the same goal. Though it has only been rolled out to three cities with six more in process, and another 11 considering it/being considered, Google's high-speed Internet service has forced other Internet service providers to react.
One of the company's chief rivals in delivering ultrahigh-speed Internet service over fiber lines, AT&T (NYSE:T) has greatly increased its service footprint recently and plans to quickly add to the areas it serves over the coming months. The company, of course, won't say it's a defensive move forced at least in part by Fiber, but it looks like the looming threat of Google deserves at least some of the credit.
What is AT&T doing?
AT&T recently brought its ultrahigh-speed GigaPower service to Los Angeles -- a city Fiber just announced plans to consider -- and West Palm Beach, Florida. It also said in a press release that it plans to bring the service to 36 more Metropolitan areas, which would bring the total served to 56.
"Customer demand for AT&T GigaPower and sales have exceeded expectations since launching speeds up to 1 gigabit per second in Austin," said AT&T CMO Brad Bentley. "The faster speeds offered through AT&T GigaPower keep consumers and small businesses connected as they are accessing more content on more devices."
Pricing for Fiber and GigaPower vary slightly by market as do setup fees. AT&T will be offering either its U-Verse or DirecTV pay-television packages along with its Internet service while Google offers its own cable-like service along with Fiber.
It's a race for customers
This is an area where being first matters. It's a bit of a gold rush to meet the demand for high-speed Internet and sign up customers before a rival gets involved.
Fiber has been taking it slow and moving into cities only after all the political hurdles have been cleared. This gives AT&T time to enter markets first and the company has the advantage of already being an ISP in those cities.
Essentially, the looming presence of Fiber has forced AT&T to act and move quickly. That's very good news for consumers because the prospect of the former Google product entering a market where GigaPower operates should keep AT&T honest.
If the telecommunications giant offers fair pricing and good customer service, then its users will likely stay on board even if Fiber does come to town. That should make the company treat people better than it historically has while also racing to offer them better service.
Consumers are the winner
It's reasonable to think based on the former Google's product strategy that Fiber is not so much about gaining subscribers but getting ultrahigh-speed Internet service rolled out in as much of the United States as possible on a timely basis. Faster Internet access benefits a company that makes most of its money delivering online ads and Alphabet likely does not care how consumers get it as long as they get it.
AT&T is helping bring the U.S. faster Internet, which makes Alphabet a winner even if Fiber stays in limited markets. Google could have gone fast and staked its claim across the country. The fact that is hasn't suggests it's getting the result it wanted by putting a toe into the ISP market.
Ultimately, consumers are the clear winner here, but AT&T and Alphabet should benefit as well. Fiber is essentially giving its rival a shot at doing a good job by its customers. If it can do so, then AT&T holds onto its ISP subscriber base. If it can't, then eventually Fiber will come in and show the telecom giant how it's done.
Daniel Kline has no position in any stocks mentioned. He would love to welcome either FIber or GigaPower to Newington, CT. The Motley Fool owns shares of and recommends Alphabet (A shares) and Alphabet (C shares). 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.