Internet Providers Don't Know How to Respond to Google Fiber

In the past few years, Google has taken up the enormous challenge of single-handedly bringing U.S. Internet speeds up to snuff with its Google Fiber service. None of that 2o Mbps, 50 Mbps or even 100 Mbps nonsense — we’re talking 1 Gbps speeds, and that’s both upload and download. Google’s initial test started in the Kansas City areas of Missouri and Kansas and, in the future, will roll into Austin, Texas and Provo, Utah.

The Google Fiber initiative ventures into territory owned by cable TV and Internet providers like Comcast, Time Warner Cable, Verizon and AT&T. In fact, for many of these companies, those services are their bread and butter. Their cash cows. You’d assume that, because Google is such a popular company and is offering such high speeds at amazing prices, these 800 lb. gorillas would move to make their own products and services more competitive.

And you’d be wrong, because these companies aren’t doing that at all. In fact, they seem unsure of how exactly they should respond to Google’s entry into their market — even though they’ve had a lot of time to come up with a game plan.

Time Warner Cable’s hilarious response to the Google Fiber offering was that “consumers don’t want gigabit Internet.” Which is kind of like saying “consumers would rather have their pizza arrive in one hour than in 10 minutes.” Fiber Internet that is 50 times faster than a really good cable Internet connection? Who would want that, right?

A fantastic article by Infoworld’s Paul Venezia attempts to make sense of Time Warner Cable’s position:

“It’s just blather — a smokescreen to obscure the fact that the entrenched monopolies/oligopolies do not want to upgrade their networks. It’s easy to justify delivering subpar performance for premium prices if you delude yourself into thinking that your customers don’t want anything more.”

AT&T’s response is only slightly better. After Google announced that it would be bringing Google Fiber to Austin, Texas, AT&T claimed it was going to do the same thing. Venezia also describes how AT&T’s current packages don’t come anywhere close to matching Google Fiber’s value — and that’s before AT&T rolls out a competing fiber network. How will AT&T take on Google without massively reducing its prices?

“To come anywhere close to Google’s $120 TV/Phone/Internet combo plan, you’d be into AT&T U-verse for $151 per month. That’s the Max bundle, which offers up to 12Mbps downstream bandwidth. Compared to Google’s pricing and speeds, that’s a joke.”

It’s a weird time to be an Internet service provider right now, especially if you’re one that has had very little competition. Google Fiber’s expansion from one city to three should not be taken lightly. If more cities are added to Google’s list, its Fiber project will start to look less like a test and more like a roll-out designed to catch its competitors sleeping.

ISPs like Time Warner Cable, AT&T, Comcast and Verizon had better wake up soon.