launched its fiber Internet network, Google Fiber, it was
clear that one possible impact would be increased competition in
the notoriously noncompetitive home Internet space.
And that's exactly what happened.
In Kansas City, one of Google Fiber's first locations, both
Time Warner Cable
bumped up their Internet speeds this week -- sometimes by more
than double -- while keeping the same monthly price.
Kansas City Star
, Comcast is doubling speeds for two of its packages and upping
another package by nearly 50%. The top upgrade for Comcast will
take Internet speed from 105 megabits per second to 150 Mbps
in the city, while Google Fiber hits 1,000 megabits per second,
Google offers its 1Gbps service for just $70 per
month. For half that speed, Comcast charges about $400 per
month in most of its markets.
noted, Comcast offered similar upgrades in California and Texas
before it brought the higher speeds to Kanas City. Google Fiber
had been closed to new customers in Kansas City for a while, but
a few weeks ago the company reopened sign-ups for its fiber
service through the beginning of August -- giving Time Warner and
Comcast a big incentive to increase Internet speeds for existing
The bigger picture
Time Warner Cable today holds about 13% of the U.S. home
broadband market, while Comcast has 24%. The two companies are in
the middle of
, with Comcast offering to buy Time Warner Cable for $45 billion
in stock. That would give the merged company a combined U.S.
Internet home service market share of 37%.
Even if a deal isn't reached, these cable giants face no
immediate threat from Google Fiber. But that could easily change
as Google moves into new cities. Evercore Partners estimates that
Google Fiber could claim up to 3 million customers over the next
seven to nine years -- making it one of the top 10 Internet
providers in the U.S.
Google Fiber logo. Source: Google.
Aside from Comcast and Time Warner upping their speeds, Google
's U-verse with GigaPower service as well. A few months ago,
Google announced that Fiber would come to Raleigh and Durham in
North Carolina, where AT&T already offers high-speed service.
Last year, AT&T announced it would bring its service to
Austin, Texas, just a day after Google said it would come to the
One reason Google likely wants to expand its own Internet
service is to ensure it isn't controlled by the biggest Internet
juggernauts in the U.S. Think of how
and Comcast to make sure its video streaming service
fast connection speeds
in certain markets.
In February, Google announced that it was considering
expanding Fiber into 34 new cities. Though it's unlikely the
company will come to all of them soon, the possible expansion
shows just how serious the company is about taking on the
Internet service industry.
Earlier this year, Carlos Kirjner of Bernstein Research wrote
that Google Fiber's growth might not bring the Internet giants
down right now, but could bring big changes in the future: "It
may not make a huge difference for Google or for the incumbents
in the next one, two or three years, but Google is taking the
long view and we think in five or more years, it could turn out
to be a significant, profitable business for Google and headwind
With Comcast and Time Warner already responding in markets in
which Google Fiber is growing, this may just be the beginning of
real competition in the home broadband space.
Leaked: Apple's next smart device (warning, it may
Apple recently recruited a secret-development "dream team"
to guarantee its newest smart device was kept hidden from
the public for as long as possible. But the secret is out,
and some early viewers are claiming its everyday impact
could trump the iPod, iPhone,
the iPad. In fact, ABI Research predicts 485
million of this type of device will be sold per year. But
one small company makes Apple's gadget possible.
And its stock price has nearly unlimited room to run for
early-in-the-know investors. To be one of them, and see
Apple's newest smart gizmo, just
Comcast and Time Warner Should be Terrified of
Google Fiber, Internet Users Should Rejoice
originally appeared on Fool.com.
has no position in any stocks mentioned. The Motley Fool
recommends Apple, Netflix, Google (A shares), and Google (C
shares). The Motley Fool owns shares of Apple, Netflix, Google (A
shares), and Google (C shares). Try any of our Foolish newsletter
free for 30 days
. We Fools may not all hold the same opinions, but we all believe
considering a diverse range of insights
makes us better investors. The Motley Fool has a
Copyright © 1995 - 2014 The Motley Fool, LLC. All rights
reserved. The Motley Fool has a