Google Fiber

Breaking cable's broadband monopoly, one market at a time

November 1, 2013: 4:18 PM ET

Rather than improving its service or cutting prices, Comcast has spent big to unseat the mayor of Seattle, who is bringing a city-sponsored high-speed broadband network to his city.

131101161217-seattle-mayor-mike-mcginn-620xaFORTUNE -- When challenged, monopolists, particularly in the communications industry, often tend to work harder to protect their monopolies than they do to improve their services or cut prices (or simply limit price increases). An excellent example of this can be found in an article today by the Washington Post's Andrea Peterson.

Comcast (CMCSA) has donated thousands of dollars to political action committees that back Washington state Sen. Ed Murray, who is challenging Seattle Mayor Mike McGinn in next week's election. The mayor has worked to bring better, faster, cheaper broadband Internet service to his city. Comcast says the donations have nothing to do with the city's plans, but as Peterson meticulously reports, much of the money Comcast had donated has come through PACs, such as the Broadband Communications Association of Washington, that are specifically devoted to influencing broadband policy.

McGinn initially wanted the city to provide high-speed broadband service on its own, like a public utility. The expense finally persuaded him, along with the University of Washington, to seek out a private-sector partner. The city is close to finalizing a deal with Gigabit Squared, based in Washington, D.C.

That company says it will offer 100 Mbps service for $45 a month, and 1 Gbps service for $80. Comcast, a major provider of broadband in Seattle, offers 105 Mbps service for $114.

MORE: What FCC's Wheeler will do about net neutrality is anybody's guess

People clearly want faster Internet, better service, and lower prices. Gigabit Squared reportedly received 10,000 requests for service from Seattleites even before the company announced its pricing plans. More than 1,000 communities around the country competed three years ago to become the first to get Google's (GOOG) high-speed, fiber-optic Internet service. Kansas City won, spurring Time Warner Cable (TWC) to improve its service. Google Fiber's presence in Austin, Texas similarly spurred AT&T (T) to begin offering high-speed service in that city. People are clamoring for it.

But none of that stopped Comcast executive David L. Cohen from writing an op-ed in June arguing basically that the demand for high-speed service (particularly speeds of 1 gigabit or more) just isn't there. Even if that were so, it could hardly be argued that people don't want lower prices and at least a minimally acceptable level of customer service. Those things come only with competition.

In the absence of any federal action to spur competition in the broadband market, competition seems to be happening so far in single cities, through sheer force of will -- usually governmental will, or the will of companies like Google, as well as that of upstarts like Gigabit Squared and Sonic, a DSL provider in Northern California that is offering competitively high speeds through phone lines.

The monopoly might be broken up, but it might have to happen one market at a time. That will take a while.

  • Google's not the only one with super-high-speed internet plans

    A number of companies and cities are trying to match Google's much-covered Fiber project.

    By Verne Kopytoff

    FORTUNE -- Google has repeatedly grabbed headlines with its ambitious plan to wire more than a dozen cities with super-fast Internet service. The attention is well deserved. People at home will be able to download entire movies in just a few seconds. Businesses will be able to shave time from online chores, build new MORE

    Jun 18, 2013 11:34 AM ET
  • Google's audacious bet on fiber -- and why it could work

    The company is building an Internet Valhalla in Kansas City. Most observers have scoffed at the effort. But they're wrong.

    By Kevin Kelleher, contributor

    FORTUNE -- Last month, Google announced its Google Fiber initiative promising 1 gigabit of Internet speed for $70 a month and throwing in dozens of high-definition television channels for another $50 a month. The announcement was greeted with equal parts enthusiasm and skepticism.

    The news elicited a lot of excitement MORE

    Aug 23, 2012 7:01 AM ET
  • Municipalities continue to embarrass themselves for Google Fiber

    The point, I hope, is that Google wants to shame the cable and phone companies into providing faster Internet service.

    Google today released a progress report on their Google Fiber for Communities project.

    Conclusion: People want cheap Gigabit Fiber to the home really, really badly.

    So much, in fact, they are willing to do just about anything:

    Google's (GOOG) motivations are simple: Faster Internet equates to more time online and more Google advertising.

    - Jul 13, 2010 4:33 PM ET
Current Issue
  • Give the gift of Fortune
  • Get the Fortune app
  • Subscribe
Powered by VIP.