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Google Fiber divides users into 'the fast' and 'the furious'

April 27, 2013 06:42 AM ET

Google's Fiber project involves the actual digging of trenches and the actual laying of fiber optic cables all the way to homes. There are innumerable logistical and legal hurdles to overcome for each city.

Google is already providing the service in Kansas City, and is still expanding into new neighborhoods there. The company recently announced that it would roll it out to Austin, Texas, then Provo, Utah.

Google offers consumers three "plans." The first is Internet comparable in speed to ordinary broadband, and it's free. The second is 1Gbps speeds and 1 TB of Google Drive space for $70 per month. The third adds TV plus a 2TB DVR box for a total of $120 per month.

Getting Google Fiber service is just like getting cable Internet service (except 100 times faster). You get a Wi-Fi capable router, and you plug your PC into it via Ethernet for the full-speed experience.

Google is spending $84 million to build the infrastructure necessary to serve 149,000 Kanas City customers. That's $563.75 per customer, for you math majors. (If that sounds like a lot of money, consider that the infrastructure gives you 100 times faster Internet for the rest of your life for the price of an iPad. Still, customers don't have to pay for it up front -- Google is doing that.) And it gets cheaper per customer with each new person that signs up.

Goldman Sachs estimates that it would cost $140 billion to deploy Google Fiber nationwide.

To put that in perspective, that one-time investment would give entrepreneurs in every state of the union a radical advantage globally, ignite an economic boom comparable to the nationwide deployment of electricity 100 years ago and enable incredible new services -- all for less than what the U.S. loses each year in offshore tax havens.

Now are you mad?

Why mad users are the best thing about Google Fiber

It's unlikely that Google will lay fiber to every city in the US, and less likely still that Google will do that Internationally. And it doesn't need to.

Google Fiber is already "inspiring" ISPs to boost speeds and investment. Google may be triggering an arms race for high-speed Internet connectivity, because it's re-setting expectations about how fast the Internet should be.

This increasingly matters as HD movies and TV becomes more mainstream. Right now, Netflix alone consumes one-third of all the download bandwidth in the U.S. at peak times.

Hollywood and other movies-on-demand services had better get busy offering compelling services. More than half the upload bandwidth in the U.S. is consumed by BitTorrent.

I think the minority of providers who figure out how to offer vastly higher speeds at very low cost will survive, and the Time Warners will get out of the ISP business for good.



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