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Google Fiber Dents Internet Service Provider Industry

The United States is now far behind other developed countries in terms of Internet speed  A prominent piece of evidence of this wide gap is the South Korean program that would bring gigabit Internet to the whole country for less than $27 per month. Gigabit internet allows users to download data at one gigabyte (1000 megabytes) per second. This means you could download high definition movies in seconds.

To put this into perspective, Google Fiber provides gigabit internet for $70. Time Warner Cable’s fastest consumer Internet package in Ohio provides 50 megabytes per second (one-20th of Google Fiber speed) for $75!  If Google, a newcomer to the internet service provider (ISP) industry, gives consumers faster speeds for less money, then why aren’t we seeing nationwide changes in internet service plans?

Decades ago, when ISPs were laying out their networks, the U.S. government allowed companies to form local monopolies across the country.  Now, even with the strict American antitrust laws in place, each ISP still remains dominant in the region that it first claimed.  Most ISPs remain locally unchallenged because of the enormous costs involved with setting up new networks.  Recently, Verizon attempted to spread its FiOS service. After only a few years of progress, the company stopped aggressive expansion, admitting that spreading its service further would not be financially sustainable.

Even with Google’s powerful support, Fiber’s growth thus far has been slow with coverage limited to a select few cities, including Kansas City,  MO, and Provo, UT.  Fortunately for Fiber, these efforts have been noticed by American consumers and ISPs alike.

In response to critics’ comparisons of ISPs’ services to Google’s, many Internet providers have claimed that most customers are uninterested in faster speeds. “We just don’t see the need of delivering [gigabit speeds] to consumers,” said Time Warner Cable’s CFO, Irene Esteves.  “A very small fraction of our customer base [subscribe to our faster Internet plans]”

Despite their opposition, American ISPs have already begun to offer deals that are competitive to Google’s, although only in the cities with Google Fiber. Nonetheless, these actions show that Fiber has made progress in achieving its ultimate goal: to benefit consumers by ending the oppressive reigns of American ISPs at last.

Written by Ramond Cao’17



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