Google Fiber (NASDAQ: GOOG) may be in less than a handful of markets today, but it's clear that the service provider's presence is driving incumbent telcos and cable MSOs like AT&T (NYSE: T) and Comcast (NASDAQ: CMCSA) to rethink their pricing plans even for their lower speed tiers.
While many consumers neither want nor actually need 1 Gbps, Google's presence is having an impact.
Take Comcast, which is the incumbent cable operator in Provo, Utah where it now competes against Google Fiber.
Wayne Parker, chief administrative officer for Provo, told Bloomberg that some customers have been able to convince their existing broadband providers to give them a lower rate if they threaten to switch to Google Fiber or another provider.
Google Fiber offers 1 Gbps broadband for $70 a month, while Comcast offers a number of lower-speed tiers bundled with 80 TV channels for $80 a month.
"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.
Meanwhile in Atlanta, a market in which Google Fiber said it plans to offer service, Comcast plans to offer a $70 service for its 1 Gbps service for customers willing to sign a three-year contract, or $139.95 a month without a contract. Likewise, AT&T lowered the price of its 1 Gbps service in markets like Austin to $70 a month.
Pricing is only one issue. It's clear that Google Fiber is also influencing local communities to develop policies that make it easier to gain permits and access to infrastructure to build out their networks.
This has been a key influencer on AT&T, which currently offers GigaPower service in 20 metro areas. The service provider plans to ultimately deliver service in over 56 communities.
But AT&T is not the only provider expanding the availability of its 1 Gbps offering. Other Tier 2 providers like Windstream and more recently FairPoint are extending their fiber-based services into more parts of their territories.
"Growing customer demand, advancing technologies and pro-investment municipal policies that lower construction costs have accelerated our recent network deployments," AT&T said last week.
For its part, Google is also trying out new fiber installation methods like microtrenching, which creates a smaller ditch to lay fiber conduit. It is also working to leverage existing infrastructure in cities like San Francisco and Huntsville, Alabama to accelerate the fiber buildout process.
- Bloomberg has this article
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