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September 03, 2014

Growing Gigabit Broadband Provision Invites Competition



By Casey Houser
Contributing Writer



One of the fastest-growing Internet service providers in the country may have a problem on its hands. Where once it was the only gigabit-speed provider in town, now it is facing some stiff competition from other telecoms that want to keep cashing in on broadband provisions of their very own.

A recent blog post at The Motley Fool, a website for the financial services company, says that Google (News - Alert) Fiber was once the sole U.S. provider that was offering ultra-fast Internet. It began in Kansas City and moved to Provo, Utah, and Austin, Texas, and everything was supposedly looking good. The company had plans to conquer other cities and undercut the competition with high speeds at reasonable prices. However, in the past year or so, traditional telecoms such as AT&T (News - Alert) have gotten wise to the Google method, and they are responding with their own brands of gigabit service. The Motley Fool discussed AT&T, CenturyLink (News - Alert), and Comcast as its prime examples:

"AT&T is building U-Verse Gigapower, already in Dallas and Austin, Texas, with plans to expand to another 100 cities. Like Google, it's using the build-to-demand approach. CenturyLink is launching 1 Gbps services in Portland, Oregon, then, based on usage patterns, will launch the service in 15 other cities. Lastly, Comcast (News - Alert) is giving all customers a [100 percent] or more boost to their network speeds, so 50 megabits per second become 105, in certain areas, as a way to combat Fiber."

In a nutshell, what the blog post is saying is that the telecoms that everyone has come to know are not fading into the background. They are not backing down from the new kid in town, and in fact, their collective willingness to fight the search giant may be creating competition that could make service more widely available and accessible at lower prices overall.

Google Fiber, for instance, charges $70 a month for gigabit service, and it appears that some consumers, and many businesses, are willing to pay that amount for the speed they receive. However, when looking across the pond, The Motley Fool points out, some service providers in China and Japan offer similar connectivity for only $20 per month. The comparison between the U.S., China, and Japan is not direct since we have differing economic and population sizes, but the fact that Google and the other telecoms are building only to suit stated demands for their services makes it so there is no wasted infrastructure. That means there are no wasted costs. And that means prices should be kept low or, as many consumers surely hope for, prices will decrease.

There is no guarantee that the competition will be good for consumers in the end. After all, before Google Fiber picked up the pace, telecoms seemed willing to rest on their laurels and keep broadband speeds relatively low while charging a premium for the luxury. For the time being, that status quo appears to be changing, but there is no telling whether or not Google will "become the next AT&T" as The Motley Fool suggests it might. 




Edited by Rory J. Thompson
 
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