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Thread: Google Fiber Vs. AT&T GigaPower: The Battle For High-Speed Internet

  1. #1
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    Google Fiber Vs. AT&T GigaPower: The Battle For High-Speed Internet

    As a resident of Austin, Texas, I have a front row seat to the battle brewing between AT&T (T) and Google (GOOG) in the high-speed broadband market. On Dec. 11, 2013, AT&T launched its U-verse GigaPower network in Austin and fired a shot across the bow of Google. In the spring of 2013, Google announced Austin would be the second city in the U.S. to receive Google Fiber after a successful launch in Kansas City, Mo. Google estimates it will have the first wave of neighborhoods wired by mid-2014. AT&T's announcement to provide Austin with its new high-speed broadband network surprised many people and is clearly a move by AT&T to protect their dominance in the industry from Google's new fiber optic vision.

    Google Fiber is Google's latest quest to be a game-changer in the high-speed broadband Internet and TV industry by building out extensive fiber networks in select cities. Google Fiber claims to be 100 times faster than today's average broadband speed, by offering 1 gigabit-per-second Gbps connections. The key to Google's plan is keeping costs down and they have laid out two main strategies to accomplish this.

    City Cooperation: Google partners with the city to make building out the network less expensive and more efficient. Google asked Kansas City to dedicate construction inspectors to their projects, so their inspections get done in a timely manner. It also works with utility companies to ensure there is space on the pole for their fiber connection to hang.
    "Fiberhoods": Google is only building to communities or "fiberhoods" where there is strong demand. Google requires each community to meet a certain threshold of interest before it builds. In Kansas City, out of the 202 neighborhoods Google identified, it signed up 180 of them for service. This limits the company building out unnecessary infrastructure where it won't see return on its investment.
    Currently Google's full package includes Internet with 1 Gbps upload and download speed, 200+ TV channels, 1 terabit of cloud storage and a Nexus 7 tablet (acting as the remote control) for $120/mo. The 1 Gbps Internet service is currently $70/mo. Google is currently waiving the $300 installation fee to new customers, but offers free Internet at today's speed (5Mbps download, 1Mbps upload) for a one-time $300 installation fee.

    AT&T's U-verse GigaPower currently offers 300 Mbps Internet to Austin residents for $99/mo, with no cost upgrade when speeds are increased to 1 Gbps in mid-2014. AT&T is also offering a $30 discount to customers who will "share" their web history with AT&T, so they can provide targeted ads to customers. Their full service package includes TV, 50 gigabit of cloud storage and three years of free HBO for $120/mo including their "sharing discount."

    AT&T is not only battling Google for broadband customers in Austin, but also for utility poles. AT&T owns roughly 20% of utility poles in Austin. Most recently the Austin City Council has taken up rule changes to allow Google to attach fiber cables to AT&T's utility poles. The city has stated they want to avoid companies putting up redundant poles across the city when access is already there, but the move is clearly intended to help the Google Fiber launch. Google spokeswoman, Jenna Wandres, said, "Google would be happy to pay for access (to utility poles) at reasonable rates, just as we did in our initial build-out in Kansas City." In response to Google's request, AT&T's VP of public affairs took a bold stand saying:

    Google appears to be demanding concessions never provided to any other entity before. Google has the right to attach to our poles, under federal law, as long as it qualifies as a telecom or cable provider, as they themselves acknowledge. We will work with Google when they become qualified, as we do with all such qualified providers.

    AT&T has done a complete 180 with its strategy to deal with Google Fiber. During Google's initial launch in Kansas City, AT&T signed a deal with Google allowing them to access their utility poles for an undisclosed sum. Clearly, AT&T doesn't want Google invading on their territory in Austin and is gearing up for battle. Perhaps this move is to make Google rethink which cities they choose in the future. This is bad news for Google. Google Fiber's massive upfront installation cost had already put the project's profitability into question and AT&T standing up to Google throws a wrench into the massive Google machine.

    Analysis

    U-verse is a large part of AT&T's growth strategy over the next several years. AT&T U-verse has over 10 million customers, with monthly revenues now topping $1 billion and accounting for roughly 10% of overall revenue. AT&T has also seen an impressive 28% revenue growth with U-verse. In the Q3 2013 alone, U-verse broadband added 655,000 subscribers and U-verse TV added 265,000 subscribers. AT&T plans to expand U-verse to 8.5 million new customer locations over the next three years. Clearly AT&T has much more to lose in this battle. Before 2012, Google didn't even have a single high-speed broadband customer, now they are going toe to -toe with all the major broadband providers. The cost of launching Google Fiber is only a drop in the bucket for Google. Milo Medin, head of Google Fiber, has acknowledged that the money the company spends on Google Fiber today is immaterial compared to Google's overall financial health. In the short term, Google Fiber will have no meaningful impact on the company's bottom line. But if it continues to have successful launches, there's no reason Google Fiber can't be a multibillion-dollar business like it currently is to AT&T.

    Innovative products like Google Fiber, make Google what it is today. Google is known for its forward thinking and technology that blows away the competition. If Google Fiber continues successful launches, AT&T has real reasons to be scared. AT&T knows it can't outspend Google, which is why AT&T's stand in Austin is so important. If they can deliver a blow in just the second city Google Fiber launches in, Google may have to reevaluate its plan forward.

    Conclusion

    In select cities where Google Fiber is being launched, I think it will be successful. It's much more difficult to determine if that success will translate into profits. AT&T's move to beat Google to the punch in Austin shows AT&T won't just sit back and watch Google eat up market share. AT&T has the existing infrastructure and customers in place to present a very difficult challenge to Google. After Austin, Google Fiber's next destination will be Provo, Utah. It will be interesting to see if AT&T pulls a similar stunt in Provo, where they already offer their basic U-verse package.
    http://seekingalpha.com/article/1903...speed-internet

    link to Google Fiber - https://fiber.google.com/about/
    link to ATT Fiber Announcement - http://www.att.com/gen/press-room?pi...rticleid=37334


    lucky bastards in kansas.... where is my gigabit hahaha... our areas here in california dont even have the higher end ATT Uverse hahah.... the max we can get access to is 12 mb down and not the 24 mb and i think thats a dsl connection lol... but thankfully we have comcast and xfinity so i get 120 mb down ... but its dam expensive and I want gigabit now from Google Fiber for half the price haha and WOW google fiber is offering free internet also if you check their site... lucky bastards in the mid west.... but they have a fiber hood in Utah but nothing far in the west area of california

    Anyone here work for google haha....

  2. #2
    Crunching For The Points! NKrader's Avatar
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    i fail to see the "battle" here..

    att charges more for way less, no battle.. google wins before the fight is started.

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    AT&T is only participating in this segment because they have to do so to avoid allowing Google Fiber to acquire significant market share in those locations, which is an entirely reactionary response. Google's rollout of 1Gbps fiber is the exact opposite, being entirelty pre-emptive.
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    I suppose, but google only offers fiber optic in 3 cities. So even if they do offer the best service at the best price, it won't effect 99% of the population for a good while. Out in Michigan the only realistic option is comcast, which has bandwidth problems all the time and is way overpriced...
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    Quote Originally Posted by AliG View Post
    I suppose, but google only offers fiber optic in 3 cities. So even if they do offer the best service at the best price, it won't effect 99% of the population for a good while. Out in Michigan the only realistic option is comcast, which has bandwidth problems all the time and is way overpriced...
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    I was going to wait for Google but I couldnt wait til late 2014, my 300 by 300 ATT connection is being installed tomorrow. For $120 per month for that connection and TV with HBO its a great price and they're throwing in a free Galaxy Tab 2 10.1 too. When Google is live I'll probably switch just because I personally loathe ATT though. Who wins when giants battle for our money? Us.
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  7. #7
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    I should hopefully have 1Gbps fiber soon where I live in Australia.

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    Everyone should spam Google Fiber contact email and say "I am requesting google to gather feedback from my local area (zip code #####) to begin the possible formation of a "fiber hood" in hopes to open up Google Fiber service"

    If everyone sends the same kind of message.... maybe they just might budge...

    By the way whats up with the 7 year note Google put on their site about the gigabit connections..... is the service only good for 7 years ?? what happens after that.

  9. #9
    Crunching For The Points! NKrader's Avatar
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    Quote Originally Posted by Budwise View Post
    I was going to wait for Google but I couldnt wait til late 2014, my 300 by 300 ATT connection is being installed tomorrow. For $120 per month for that connection and TV with HBO its a great price and they're throwing in a free Galaxy Tab 2 10.1 too. When Google is live I'll probably switch just because I personally loathe ATT though. Who wins when giants battle for our money? Us.
    its alright deal,
    i got comcast here with 50/10 and 100+ channels with hbo for one year for 90$ more internet speeds are better obviously but what they are selling should be cheaper.

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  10. #10
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    Quote Originally Posted by Budwise View Post
    I was going to wait for Google but I couldnt wait til late 2014, my 300 by 300 ATT connection is being installed tomorrow. For $120 per month for that connection and TV with HBO its a great price and they're throwing in a free Galaxy Tab 2 10.1 too. When Google is live I'll probably switch just because I personally loathe ATT though. Who wins when giants battle for our money? Us.
    This. Given the choice - Even at completely equal service for an equal price, I will chose Google. I've had terrible service with AT&T for years, but they're my best option. Everything else equal, I chose to give the new-comer a try.

    That said, I doubt things will be equal... I fail to reach my rated speeds on a regular basis (aka, except for 4 AM-7AM, I can't touch what I'm supposed to get)

    Quote Originally Posted by hecktic View Post
    Everyone should spam Google Fiber contact email and say "I am requesting google to gather feedback from my local area (zip code #####) to begin the possible formation of a "fiber hood" in hopes to open up Google Fiber service"

    If everyone sends the same kind of message.... maybe they just might budge...

    By the way whats up with the 7 year note Google put on their site about the gigabit connections..... is the service only good for 7 years ?? what happens after that.
    They are only guaranteeing to be in the market for 7 years. After that they will re-evaluate their strategy and progress and determine what they want to do. Essentially, it's an exit plan if they so chose.


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  11. #11
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    Do you trust Google that much?
    Would you really expose all your traffic, ALL of it, to a company which makes profit out of selling data?

  12. #12
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    Whats new? If your already using the search engine, e-mail, web pages, documents, clouds, phones, etc that is already connected to the infrastructure?

    You think every company out there isn't using some sort of data in some what for their benefit already?
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  13. #13
    Crunching For The Points! NKrader's Avatar
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    Quote Originally Posted by El Mano View Post
    Do you trust Google that much?
    Would you really expose all your traffic, ALL of it, to a company which makes profit out of selling data?
    every company sells data, only some have let the cat out of the bag.

    i dont really care. take my data, if someone was watching everything that I did all the time I wouldnt care.

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