Google Fiber's presence pressures AT&T to adjust 1 Gig pricing plans

Google Fiber (NASDAQ: GOOG) may have only rolled out its 1 Gbps fiber to a few markets, but it's clear that its presence continues to place pressure on AT&T (NYSE: T) to adjust the pricing of its own fiber-to-the-premises (FTTP) U-verse with GigaPower in the markets where it competes with the Internet search giant.

AT&T recently rolled out GigaPower service for $110 a month in Cupertino, Calif., a market where Google, which has headquarters in nearby Mountain View, has not launched plans to roll out its FTTP service yet.

But it's clear that AT&T is intent on matching Google Fiber's pricing regime.

In other markets where AT&T offers GigaPower, such as Austin and the Kansas City area, two markets where Google also provides service, AT&T has cut the price of its 1 Gbps service. It has also adjusted the prices of service in Charlotte and Raleigh-Durham, N.C., two markets Google Fiber cited as future spots to deliver its competing service.

Specifically, AT&T cut the price of GigaPower in Dallas to $110 from $120. Likewise, in Winston-Salem and Raleigh-Durham, AT&T reduced the price of service from $120 a month $70 last month.

Today, Google Fiber offers its standalone 1 Gbps service for $70 a month in three markets: Austin, Kansas City and Provo, Utah.

Eric Boyer, senior vice president of AT&T's U-verse Internet and TV service, told The Wall Street Journal that it is analyzing how to best price the 1 Gbps service and is adjusting its offering as it gets a better handle on how customers use the service.

"We are trying to understand how different markets respond," Boyer said.

One of the notable differences with AT&T's 1 Gbps service is that it imposes a 1,000 gigabyte usage limit. While AT&T said it has not found any users that have gone over that limit, neither Google Fiber nor Verizon (NYSE: VZ) implement usage caps on their FTTP offerings.

A number of smaller telcos, cable operators and municipalities such as Cincinnati Bell, Grande Communications and EPB Fiber offer standalone 1 Gbps that range from $70 to $80 a month. On a slightly higher scale, TDS Telecom offers its 1 Gbps service for $99.95 in a number of rural markets like Hollis, N.H., and Farragut, Tenn.

For more:
- WSJ has this article

Special report:  Gigabit Wars: The best prices for 1 Gbps service from ILECs, MSOs and municipal providers

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