This past week Google announced that they are expanding Google Fiber to Austin, Texas. Google Fiber is Google’s version of high-speed Internet, which can download at up to 1000 Mb per second, and digital cable television service. This is 100 times faster than any other Internet provider. Google Fiber also gives you one terabyte of storage, which can be used to record up to eight HD TV shows simultaneously. Google provides you with a brand new Nexus 7, that you use as a remote to control your TV.
Google Fiber is currently only being provided in Kansas City, KS and Kansas City, MO. Future cities that will have Google Fiber are Westwood, KS, Westwood Hills, KS, Mission Woods, KS, Kansas City North, MO, and Kansas City South, MO. Google offers three prices for Google Fiber:
- Gigabit + TV: $120/month ($300 construction fee waived)
- Gigabit Internet: $70/month ($300 construction fee waived)
- Free Internet (5 Mb): $0/month (for at least seven years) + $300 construction fee
These higher Internet speeds would eliminate those irritating YouTube buffers and would speed up downloading/uploading files. However, are the benefits of Google’s high-speed Internet worth the cost? It is estimated that it cost Google $11 billion to install Google Fiber nationwide, 20 million homes. That comes out to roughly $550 per home. With Google waiving the $300 construction fee, it would take five monthly payments of the highest-priced service, Gigabit + TV, to pay for the installation of Google Fiber to a home. Google would not start making a profit until five months after installing the service to a home. That is a long time to make a profit. This could prevent expansion to other cities.
In order to receive support from city politicians and residents, Google will install Google Fiber to public institutions for free. Hospitals, schools, community centers, and libraries will get Google Fiber installed for free. The rollout of Google Fiber also creates jobs in the Austin area and creates economic growth.
But is Google Fiber really necessary? The current U.S. average Internet speed is 7.2 Mb per second. While 7.2 Mb is not ultra-fast, it is still quite fast. Should Google not be focusing on expanding Internet access globally? Google should focus their Internet operations strategy on providing access to areas where it does not exist. We can wait for Google Fiber until everyone has access to the Internet first.
Analyst: Google Will Spend $84M Building Out KC’s Fiber Network To 149K Homes; $11B If It Went Nationwide: http://techcrunch.com/2013/04/08/google-fiber-cost-estimate/
Austin Next City for Ultra-fast Google Fiber: http://www.businessweek.com/ap/2013-04-09/austin-expected-to-be-next-stop-for-google-fiber
Google Fiber: https://fiber.google.com/about/
Google Fiber Expands TV, Internet to Austin, Texas: http://www.abcnews.go.com/blogs/technology/2013/04/google-fiber-expands-tv-internet-to-austin-texas
Residents and Businesses Excited for Possibilities Google Fiber Brings: http://www.kxan.com/dpp/news/local/austin/residents-excited-for-possibilities-google-fiber-brings
US Internet Speed Lags Behind S. Korea, Latvia: http://www.abc15.com/dpp/news/science_tech/us-internet-speed-lags-behind-s-korea-latvia
15 thoughts on “High-Speed Internet: Is it Still High-Speed?”
It is interesting to see technology being taken to the next level with Google introducing the Google Fiber. Your general question of it being necessary right now is making me wonder the same thing and I believe that this will become a luxury product for the American consumers because of its impressive speeds and price. Google and it’s management seems to be thinking long-term and is trying to get ahead in the market by gaining a competitive edge and I think they are making the right moves by starting out small in a couple of states. I can see this product being used in millions of households in the upcoming years. This is an interesting post, great job.
I think I have some answers to those very intriguing questions you asked. Google is trying to build market share in the super-high speed industry very quickly, and that is why they are waiving the instillation fees. Google is trying to beat out Time Warner and Comcast in order to become the leading provider of super-high speed internet. Remember blue ocean!
Google is not expanding it nation-wide, because they want to test the market first. Secondly, Google only wants to start building it in cities that give Google unrestricted access to city assets and infrastructure (Kansas City) which helps reduce Google’s start-up installation costs. That is why Google is installing the service for free in public places so that they can get clearance to go around the long, slow arm of city government when it comes to installing the infrastructure throughout the city.
Finally, it behooves Google to get Gigabit in am many households as possible as I am sure Google has a way to monitor what TV shows you are watching and use that for marketing purposes.
Although it takes a long time to make a profit out of this business model, Google realizes they’re building a long-term relationship with the customer. If speeds are incredibly fast, installation easy, and the customer service is good, then I don’t see too many cons to it all. As someone who doesn’t watch TV, Google seems to be offering a lot of bundles without the hassle that perhaps companies like Comcast impose.
I also agree with jwollwert in that they’re testing the market. Because it’s so new they want to see how it works, but they’re also building up huge interest in Google Fiber in the process. We’ll have to see how it goes but it sounds incredibly appealing to me.
As you point out, it would be an enormous cost to Google to continue rolling out Google Fiber and waiving installation costs. However, by rolling this out over a longer period they will eventually realize lower costs. This is because costs in technology decrease year to year. Therefore, although it might cost $11 million to roll this out nationwide today, it probably won’t cost this much under Google’s current model.
By taking out the middle man, cable and internet providers, Google is tightening their relationship with the customer. This allows them to more tightly control the customer experience (similar to Apple and iOS). In addition, if Google can track your internet habits even if you’re not using one of their online services this will greatly enhance the data they can mine. In the future this will open up more revenue channels.
It’s clearly an ambitious plan to roll out Google Fiber. Google seems committed to making it happen. It will bring us greater speeds in more places.
I was listening to NPR and they made a great point to how google might change up the way you pay for service.
So yes Google will charge a monthly rate but NPR made the point of why don’t they try to lower the rate compared to cable companies by throwing in advertisements as they do with search. Ads are how Google makes money and I’m sure that’s going to be their business plan moving forward.
Also like with what Brad said, Fiber just gives Google more insight into their customer’s habits so they can more easily track how their customers are using Fiber.
Another point NPR mentioned is that with Fiber, all the advanced computing that you might need a dedicated desktop for now, will be handled in the cloud which frees you to use something like a tablet or phone to handle large tasks like video editing.
Everyone is making some very interesting points about Google as a new internet provider. Personally, I think its great they are testing the market first because this will give them the feedback they need. Testing only a few cities like Kansas City allows them to see what types of problems they may run into in the future. With that being said, they have time to fix these minor errors in the selected cities they are choosing to test the service.
Like Baccarino said, although it is costing them $11 million dollars currently, they will easily make this back. It will take them atleast 4 months to start gaining profit, but when they start they will most definitely be happy with it. I think its really great that Google is installing internet in public places where those that don’t have easy access can start experiencing internet at these super fast rates. Hopefully, as mentioned earlier by someone else, they will install Google Fiber in areas that really do need it in other countries in the world. This is just another luxury for the average American, but Google knows it is something we all crave in today’s world. Faster is always better.
This is a very interesting article and very intriguing. RIght away this product, “Google Fiber”, seemed almost like a luxury to internet consumers. With these ridiculous download speeds I think they are way ahead of the market and have a product that has a significant edge to all other high-speed internet services. That being said I think there marketing plan is even better. They are starting small, in only a few cities, and giving to to schools, hospitals, and libraries for free in order to gain market share and create a buzz. I think the “waived” construction fee is also an incentive for these people to buy “google fiber.” However, as the article said, it takes five full months for google to break even per household after incorporating all expenses. I think once market share is gained, and positive influence from communities and other institutions are present, this “waived construction” fee will no longer be waived. Google is clearly in it for the long, slow and effective growth, and I think they are playing this perfectly. Once the time is right they can rearrange their costs, and fees so that this product will exponentially bring in larger profits in a quicker time frame. Finally, I can add, after reading this I think google just found their first customer when it becomes available in Chicago!
It is very interesting to read the Google Fiber has suddenly become a faster way of connecting through the internet. According to the article above Google Fiber is 100 times faster than any internet provider. This is going to help decrease buffer time, and increase activity throughout the web, but at what cost. My initial thought it that while the internet connection may be faster than the likes of Comcast and Time Warner, is the faster connection going to correlate with higher prices. I would assume that, yes the price is going up when technology increases. An article I read recently read about Comcast depicted that Comcast also has recently increased their speed by merely flipping a switch to make the connection faster. While I cannot find that particular article at the time, it makes me wonder is Google really creating better technology, or was the technology already in place, and is a mere formality because all internet providers are increasing their connection speeds?
It is very interesting to read the Google Fiber has suddenly become a faster way of connecting through the internet. According to the article above Google Fiber is 100 times faster than any internet provider. This is going to help decrease buffer time, and increase activity throughout the web, but at what cost. My initial thought it that while the internet connection may be faster than the likes of Comcast and Time Warner, is the faster connection going to correlate with higher prices. I would assume that, yes the price is going up when technology increases. An article I read recently read about Comcast depicted that Comcast also has recently increased their speed by merely flipping a switch to make the connection faster. While I cannot find that particular article at the time, it makes me wonder is Google really creating better technology, or was the technology already in place, and is a mere formality because all internet providers are increasing their connection speeds? (Real Comment)
This is a very intriguing post as I am a huge fan of google. I believe that google knows what they are doing because they know it will take time to take over nationally as far high speed internet goes. They are starting in a few towns and they will continue to build off that. You brought up a valid question when you said, “Are the benefits of Google’s high-speed Internet worth the cost?” Initially, it doesn’t seem like they will make much money as the estimated cost is 11 billion to go nationally with Google Fiber. At first, they won’t break even for a while, but Google will make their money back easily. I believe that eventually google fiber will be in most households. Then Google can reduce their costs for Google Fiber and still be making a good chunk of money in the process. I just feel like this makes sense to me thinking long term and they shouldn’t have that many problems making their money back.
This is amazing, I have never heard about this until now. 1000 MB per second is super fast and will make it more efficient when you are using the internet. From a business perspective, you can save time and money when you can use the internet faster. If I have to wait a long to to go from page to page then it is wasting time that I could use for other things. If you are doing a business presentation to investors and your internet is too slow and it takes a while to buffer for Youtube then you are wasting time and it looks bad in front of the investor. This project will create a lot of jobs and improve efficiency which is good for business. When you are more efficient you make more money. So you can reinvest that money back into your business to expand. This will create more jobs which has a great long term effect on the economy.
I have high praise for what Google is doing with this. They are bringing attention to fact that the major internet providers that dominate the market today are taking advantage of consumers by offering fractional internet speeds for unreasonable prices. Instead, Google is thinking about the average consumer by offering substantially faster internet for a price that is equal to or less than what is charged by other companies. Separately, it is important to recognize that most people would not even be able to use Google Fiber to its full potential; which is also often used as an argument to question the point of switching to its service. If most of us are satisfied with what we have and all of our needs are met, then why would we switch to Google Fiber in the first place? I think that question is a bit naïve. Ken Olsen, founder of Digital Equipment Corporation, said in the 70s that “there is no reason for any individual to have a computer in his home.” It is obvious to see how silly that sounds today, but back then computers weren’t an integral part of everyday life like they are now. But society grew and evolved, and computers transformed the way we lived. I think Google Fiber has the potential to do something similar. Though you and I may not be able to capitalize on the speeds Google Fiber has to offer, it allows engineers and programmers to begin the creation of new “live” applications that otherwise would not be able to function efficiently on current speeds. It is about the future and what kinds of programs/applications this break in internet speed barriers will allow people to craft up within the next five, ten years; ones that could quite possibly revolutionize our experience on the internet.
I really like the approach Google is taking to internet. Over the past few months I have grown extremely fond of the company, they have been expanding rapidly and I am excited to see where they will go. I did some research on Google Fiber and like many others have mentioned it is 100x faster than your average high speed internet. What I am really interested in is seeing how Google enters the infrastructure industry. Just like Comed, Google will turn into a super power because of their fiber optic connections. I have a feeling other service providers will be paying Google to use their fiber optic network the way electricity companies pay Comed to use their lines. It’s cool to see that Google is offsetting the market with their products through the pricing. Similar to their Google Fiber service, they are selling their unlocked Google Nexus 4 phones for $299 which is strategically priced to throw off the market value for smartphones so that consumers have the option to own a powerful smartphone for an affordable price.
I would like to see Google provide Google Fiber globally because internet providers that claim that they are giving 7.2 mbps add the word upto before the speed number which means that they are not really giving that speed. AT&T, top internet provider, service has been interrupting quite a lot now than before which is putting their reputation at risk. I would like to see Google try to go global and offer fast internet speed that could really increase production and therefore boost the economy.
“Google Fiber” High-Speed Internet: Is it still high speed? America has been a lead country of technological advancements in the world up to recently. However, today, US high speed Internet service falls into a mediocre range. If “Google Fiber” is launched quickly and is successful, many opportunities will be created, bringing back a competitive advantage. A problem exists that the cost of “Google Fiber” is tremendous. In the long run though, the American society will benefit from a better Internet infrastructure. It will force other Internet providers to compete with a better and faster quality service for American customers.