Credit: Hannu Viitanen
With Net neutrality in serious jeopardy, and cable giants Comcast and Time Warner Cable on the verge of a competition-killing merger, is there any good news for Internet users? Yes, there is, courtesy of Google, which appears to be making a serious run at the market for high-speed broadband.
In the last few months, Google has announced plans to explore fiber-to-the-home (FTTH) networks in 34 cities, and it is reportedly planning to spend $1 billion or more on a fleet of satellites that would connect unwired regions of the world. Google is also rumored to be in talks to purchase Skybox Imaging, a builder of low-cost, low-orbit, imaging satellites. Clearly, Google is looking seriously at Earth orbit for connectivity or imaging (for mapping) -- perhaps both -- as well as more conventional ways to bring connections as fast as 1Gbps to its customers.
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Despite the high cost of Google's proposed FTTH projects, a recent report from analysts at a major investment bank states that the cost barrier can be overcome: "We think there is a nontrivial chance that Google could build Google Fiber into a profitable competitor to cable and telephone companies," wrote analysts Carlos Kirjner and Peter Paskhaver of Sanford Bernstein.
Silicon Valley uses the phrase "disruptive" far too casually, but a serious attempt by Google to become a major provider of ultrafast connectivity would in fact disrupt the cozy, oligopolistic world of the major Internet service providers. If so, that would be very good news, indeed.
America, far from first in broadband Internet connectivity
Despite our country's wealth, consumers and businesses in the United States are plagued with broadband connections that are on average slower and more expensive than those of developed countries in parts of Europe and Asia. The average download speeds in the United States are about 10Mbps, less than half of that enjoyed by users in South Korea, according to Akamai's State of the Internet Report.
Because averages are distorted by outliers, it's worth noting that two-thirds of U.S. users have speeds that are slower than 10Mbps, and more than a quarter of U.S. homes have no broadband service at all. In other words, America's broadband infrastructure is truly substandard.
Blame this poor showing on the lack of serious competition in the broadband market. In many parts of the country, there are only one or two providers to choose from. No surprise, the choices are very similar in what they offer and the price they offer it for. That's an oligopoly at work. Yes, cable connectivity is almost always faster than DSL over copper wires, but still not very quick compared to the rest of the developed world.
Worse, the two biggest landline providers of broadband -- AT&T and Verizon -- have been excruciatingly slow to build out true FTTH networks. (Although AT&T's Uverse is billed as FTTH, it isn't. It's a hybrid of fiber and copper.) As a result, Netflix reports that its users -- who consume about a third of current Internet capacity -- get far worse performance from AT&T and Verizon than they do from the Google Fiber service now available in a handful of cities.