Google Fiber (NASDAQ: GOOG) confirmed on Tuesday that it would bring its 1 Gbps fiber-to-the-premises (FTTP) services to four new metro areas in the Southeast--Atlanta, Nashville, Charlotte and Raleigh-Durham, N.C.,--illustrating its desire to continually shake up the status quo of the broadband market.
Pricing for these new areas was not revealed, but it's likely it would follow a similar line it has taken in other markets where the service is available, including Provo and Kansas City: 1 Gbps symmetrical line for $70, a 1 Gbps symmetrical line and TV service for $120, or a 5 Mbps offering that's free after you pay a $300 installation fee (to be paid all at once or in installments).
The service provider also confirmed that it is still considering bringing the FTTP service to four other cities, including Salt Lake City, San Antonio, Phoenix and San Jose. Ultimately, the movement into those markets depends on its ability to get access to each city's rights-of-way and a favorable permitting process to lay its fiber facilities.
Dennis Kish, vice president of Google Fiber, said during a conference call that what drove the decision to enter these markets was that consumers are becoming more aware of the value of having a higher speed connection.
"We truly believe that speed matters," Kish said during a press conference. "When people expect delays on the web and the sites they are looking at, they tend to move on to other things, so having that additional speed helps to increase engagement and helps for any companies doing business over the web."
But the bigger impact of Google Fiber's move is how it is shaking up the overall broadband market by highlighting the lack of affordable higher speed services. According to the FCC, which plans to vote on a proposal to raise the definition of broadband to 25 Mbps today, only 19 percent of U.S. residents can get that speed, while another 55 percent have only one provider that offers such a service.
It's clear that the presence of Google Fiber has been driving incumbent telcos to move ahead with their own plans. Evidence of this trend was seen throughout last year when a flurry of incumbent telcos and even cable operators like Cox revealed their intent to deliver 1 Gbps service.
In North Carolina, Google Fiber will compete against incumbent telcos AT&T (NYSE: T) and Frontier, which are both delivering similar services in these towns. Frontier named Durham as a 1 Gbps market, while AT&T announced plans to bring its Gigapower service to a number of North Carolina towns and cities sometime this year.
What's also interesting about Charlotte, Raleigh and Durham is that AT&T, CenturyLink (NYSE: CTL), and Time Warner Cable (NYSE: TWC) all fought hard for a state law that would limit or prohibit cities from building out their own networks, a move that will help these incumbents maintain their hold on the state's broadband destiny.
Ultimately, North Carolina Governor Bev Perdue decided not to veto the protectionist law in 2011 when it appeared on her desk.
It appears that Frontier isn't really worried about Google Fiber. Frontier told WRAL TechWire it is moving ahead with plans to deliver its 1 Gbps service in Durham. The service provider announced its plans in October, but since then has not revealed how many customers are actually using the service.
"We are making good progress on the expansion of our existing fiber network allowing us to expand FiberOffice and FiberHouse Gigabit services," Dennis Bloss, vice president and general manager for Frontier in North Carolina, told WRAL TechWire.
It appears that a big focus for Frontier will be to bring service to Greenfield developers. Bloss said that it is holding talks with "several new developments all over Durham County and have committed to several projects that are taking shape in 2015."
Overall, Google Fiber's movement has been relatively slow for what is a 5-year old company. Today, its service is only available in a handful of cities to a few thousand customers.
Given the challenges and costs of building a fiber network from scratch, it's unlikely that Google Fiber is ever going be available on a nationwide basis. However, its presence is changing how consumers look at speeds while forcing incumbent service providers to respond to the fact that there's a lack of competition in the broadband market.--Sean