Google finally unveiled its pricing plan and opened signups for its Google Fiber internet service in Austin, Texas. Here's what the program means for the City of the Violet Crown.
With Google Fiber leading the conversation around gigabit internet, cities are jockeying to be next in line for the fiber optic connection. Austin, Texas was lucky enough to be chosen by Google for Fiber, but the plans have been slow to materialize.
Back in in April 2013, it was announced Google Fiber was coming to Austin. Those plans are finally starting to materialize. On Monday, Google announced on the Google Fiber blog that it was beginning signups for the service in the southern part of the city, encouraging individuals and small businesses to sign up.
Austin is the third metropolitan area behind Kansas City (Kansas and Missouri) and Provo, Utah to receive the service and is a markedly bigger step in the direction of establishing Fiber as a real revenue stream for Google.
Looking strictly at population, Austin is the largest city with a Fiber deployment to date. As of the 2010 census Kansas City, Kansas is a city with a population of roughly 145,000; Kansas City, Missouri has around 460,000 residents; and Provo, Utah has a little more than 110,000 people living there.
Austin, on the other hand, claims nearly 900,000 Austinites and is one of the fastest growing cities in America. Even if you combine both of the Kansas City populations, which is fair because they comprise the same metropolitan area, the total is little more than 600,000. That's nothing to scoff at, but it isn't comparable to Austin.
Much like the other Google Fiber cities, there are specific enrollment dates for different neighborhoods in the city. Austin residents can find that schedule here. And consumer residents can sign up for one of three plans. They can choose to pay $130 a month for gigabit internet and 150 television channels, $70 for just gigabit internet, or nothing for the free, 5mbps, internet service that comes with a Fiber installation. Small businesses will pay $100 a month for gigabit internet, with the option to add one static IP for an additional $20 a month of five static IPs for an additional $30 a month.
For those who choose either of the gigabit plans, you'll also receive 1 TB of cloud storage for Gmail, Drive, and Google+, and your construction fee will be waived if you sign a one year commitment with Google. For those who opt for the free service, you have to pay the $300 construction fee which can be paid in full up front, or in $25 installments over a 12 month period.
It's worth noting that construction fee has increased dramatically since the first deployments in Kansas City and Provo. According to Dixon Holmes, the deputy mayor of economic development in Provo, the construction fee was only $30 when Google began piloting the service in Utah. The only difference in price now is that the gigabit plan with TV in both Provo and Kansas City is $10 cheaper at just $120 a month.
I wrote earlier that Google could be making a play at Fiber simply to drive incumbents to provide better service. This price increase could mean that Google is done experimenting with Fiber as a way to spur incumbents, and the service is looking more and more like a real product that could provide real revenue.
Being that more than 90% of Google's revenue came from advertising in 2013, the company could stand to benefit handsomely from diversification of its revenue streams.
Still, if Google is able to make Fiber a popular option in Austin, it could push incumbents to another, less-favorable, find of action.
"If Google captures Austin, it will scare the incumbents, who will most likely try to block Google expansion through lobbying and licensing rather than trying to compete head-on," said Jeff Hecht, author of Understanding Fiber Optics.
Legacy providers such as Comcast, Time Warner Cable, and Charter Communications have never been superstars in terms of customer reviews, but they have lately been dragging along the bottom of the American Consumer Satisfaction Index.
As far as internet options for these companies go, you're unlikely to get anything remotely close to fiber speeds. On Comcast's website, a 50 mbps internet option is advertised for $60 a month. Compared to Fiber, 1000 mbps for $70, meaning you are paying 85% of the cost for 5% of the internet speed. Time Warner charges $65 for 50 mbps.
An unlikely incumbent provider that could pose a threat to Google Fiber is AT&T, which announced its own rollout of gigabit internet service on October 1, 2014. AT&T is providing its fiber offering through its U-verse service with pricing that is identical to Fiber's pricing in Provo and Kansas City — $70 for gigabit internet, $120 for gigabit internet and and TV, and also a $150 option with gigabit internet, TV, and voice service. All options include installation.
While there is no free option advertised on the U-verse site, it does guarantee the pricing on all three plans for 36 months. Just like Google, the U-verse options require a one year commitment, but the top two pricing tiers include HBO for 36 months and a free Galaxy Note Tab 4.
According to Hecht, moving into Austin is a strategic move for Google.
"All in all, I suspect Austin represents the direction Google wants to go in — fast-growing, tech-oriented communities with a thirst for bandwidth," Hecht said. "Their pricing is aggressive enough to challenge the incumbent, but should be adequate for Google."
Austin is known as a burgeoning technology hub, with a plethora of new startup companies making waves in their respective industries. Google Fiber brings yet another resource that could lead to even more new technologies and businesses.
At the very least, more people consuming more of the internet is always a good thing for Google. And, the bundling of Drive and Gmail storage was no afterthought, as it exposes more and more people to the Google product ecosystem.
Accessible fiber internet is the most disruptive innovation in the telecommunications industry right now, and it is clear that, for now, its developments lies in the hands of Google, Verizon, and AT&T.
What do you think?
We want to know. Do you plan on getting fiber internet for your home if it's available? Do you think Google has a shot as an ISP?