Last week Google jumped into the world of Internet service providers by announcing it is deploying a fiber optic network in Kansas City to offer high speed Internet access to residential customers. And when they say high speed, they mean it. Where the typical high speed cable connection is a 10mb connection (20mb if you opt to pay a little more money), Google Fiber is 1000mb.
Geeks around the world rejoice.
However, this isn’t the first residential fiber offering. Verizon has been offering Fios for some time, but it’s still not a widely used service. Part of that is availability. Fiber is a newer technology, and it requires significant construction. (This is why Google partnered with one city to make the initial launch of Google Fiber.) Beyond that, people are typically slow to adopt new technology like this. Current Internet speeds are “good enough,” and a change isn’t easily justified.
Fiber is also a largely unknown technology. Sure, geeks like me know all about it, but the typical home Internet user has no idea of the benefits of using fiber. As benefits are shown, demand will grow, and eventually we’ll be looking back at a cable modem and laughing at what we thought were high speeds.
Google’s entrance into the market is great, especially if you live in Kansas City. I’d sign up for that service in a heartbeat if I had the option. But while I was watching the press event online last week, the thing that stood out to me the most is the competition Google is bringing to the residential high speed market.
First DSL was king. Then cable companies were able to offer much faster speeds for the same price (sometimes less). Now Google is in the mix, putting pressure on the cable companies’ bottom line. While my inner geek loves the new solutions coming to the market, the capitalist in me loves watching the competition. The added competition in this marketplace, as it always does, benefits customers in two very obvious ways:
1. Competition gives consumers better choices.
Obviously the customer now has more choices, but the choices are better. The obvious advantage to the customer is the speed offered by Google Fiber, but the competition will also make the cable companies’ service better. They won’t be able to compete on data speeds, so they will have to compete in other areas: price, quality of service, faster installation times, and better customer support, to name a few.
2. Competition lowers prices.
I mentioned this briefly in #1 above, but it’s a big issue worth pointing out. Not only does the competition make the quality of the products and services better, it lowers their price. The cable companies will lower their prices to better compete with Google Fiber, and should more fiber options become available, Google will get even more competitive with its price model.
In the end, the customer wins because no matter what choice he makes, all of his options are better than they were before the added competition entered the marketplace. This is a perfect opportunity for those capitalists among us to predict what will happen in that market and use Google Fiber as an example of how more competition in other areas will benefit everyone involved.
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