Google Fiber is Forcing ISPs to Lower Prices, Speed Up Service

Google Fiber may not be available to all that many subscribers yet, but the effort continues to force incumbent ISPs to step up their game — and lower their traditionally high prices. Generally, Google Fiber has paid dividends by generating a nationwide conversation not only on the lack of broadband competition in most markets, but on the way companies like AT&T, Comcast, Time Warner Cable and CenturyLink have quite literally written state laws aimed at keeping things that way.

More specifically, Google Fiber has also pressured ISPs to accelerate their deployments of gigabit broadband, while also lowering prices to meet Google Fiber’s $70 price point.

In markets that face Google Fiber competition, for example, AT&T will charge its “Gigapower” gigabit customers $70 a month for service. Step outside of those markets, however, and that price point quickly jumps to $110 a month or higher. And as Bloomberg notes, Comcast has also been forced to accelerate gigabit deployments and try to retain customers by lowering prices, an alien proposition for many incumbents:

Many customers in Provo, Utah, where Google Fiber was rolled out in 2014, have managed to wrangle lower rates by calling their existing providers and threatening to switch, said Wayne Parker, chief administrative officer for the city. Google s 1 gigabit access costs $70 a month, while Comcast offers lower-speed Internet access packaged with more than 80 TV channels for as little as $80. We ve heard from a lot of people, I am not going to go to Google because I don t need to get 1 gig, but I got a screaming deal from Comcast, said Parker.

Bloomberg quotes several people claiming Google Fiber is more “bark than bite,” but the impact Google Fiber has had on the market can’t really be over-stated. Yes, Google Fiber’s only available in a few areas now, but Wall Street has recently started to realize that as Google Fiber’s laundry-list of planned markets come online over the next five years, incumbents will start feeling more than just love bites. And again, the conversation Google Fiber initiated has accelerated cities looking to strike public/private partnerships to improve service, which also pressures incumbent ISPs.

Our long-term goal is to create abundance in terms of connectivity and speed where there s a scarcity, said Google Fiber’s Jill Szuchmacher on the company’s recent earnings call. In the cities where we are offering service, we have seen an increase in competitive offerings.

 

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