Challenged by Google Fiber, ISPs opt to hasten their downfall

Last summer I posited that Google’s fiber play in Kansas City would create a ripple through other regions of the country. It appears this is happening now, albeit in ways I don’t think anyone really expected.

The first surprise was the continued ostrich maneuver that some big cable and DSL providers are pulling, namely the “customers don’t want gigabit Internet” front. This could be likened to a lead paint salesman pooh-poohing latex paint because “customers don’t want their health.” It’s just blather — a smokescreen to obscure the fact that the entrenched monopolies/oligopolies do not want to upgrade their networks. It’s easy to justify delivering subpar performance for premium prices if you delude yourself into thinking that your customers don’t want anything more.

[ Also on InfoWorld: Google Fiber puts the ISPs to shame. | You’ll never get Google Fiber — but you don’t need it anyway. | Why we need to win the battle for the ultrafast Internet. | Get the latest practical info and news with InfoWorld’s Data Center newsletter. ]

The second was the speed with which Google Fiber has been requested and deployed. There are already plans to expand the initial Kansas City footprint, and Google recently announced plans to deploy a new network in Austin, Texas, as well as purchase a failed community fiber network in Provo, Utah, and turn it into a Google Fiber plant. Suddenly, we’re looking at gigabit fiber Internet in three locations in the United States, not just a “test” in Kansas City.

Third was the reaction from other segments of the incumbent ISP cabal. AT&T announced it will be deploying a gigabit fiber network in Austin as well. Forgive me if I don’t hold my breath on this one. I figure this is a press release designed to bluff Google and other involved parties in the Austin area and to gain some mindshare that AT&T is stepping up to the challenge.

Frankly, I think it would be a waste to roll out two separate fiber networks in Austin simultaneously, so AT&T is trying to steal some thunder here. Of course, given AT&T’s track record, stealing thunder might be all it can do.

Let’s take a look at AT&T’s current pricing. To get 6Mbps downstream (undisclosed upstream on that site), TV, and phone, the rate is $79 per month, which is $9 more than Google’s package with symmetric gigabit data speeds, but no TV or phone.

If you dig a little further into AT&T’s packages and pricing, you find that this $79-per-month plan, called the Elite package, is not recommended for such ridiculous luxuries as emailing/uploading files, downloading movies, streaming video, or videoconferencing. Let that sink in for a second: $9 more per month than Google Fiber, and you shouldn’t use it to send files or Skype. How ridiculous is that?

To come anywhere close to Google’s $120 TV/Phone/Internet combo plan, you’d be into AT&T U-verse for $151 per month. That’s the Max bundle, which offers up to 12Mbps downstream bandwidth. Compared to Google’s pricing and speeds, that’s a joke.

If you want any faster, you have to forgo the TV and phone and get AT&T’s Max Turbo Internet package, which is $54.95 per month and clocks in at a whopping 24Mbps, or 2.4 percent of the speed of Google’s gigabit fiber. For $15 less than Google Fiber, you get roughly 1/40th the speed.

These prices and offerings are so far apart they can’t be considered competitive in any sense of the term. Yet AT&T is going to deploy gigabit fiber in Austin to compete with Google? I don’t see how it could possibly do so without massive price reductions across the board.

What we have here is essentially chaos among the entrenched ISPs. One major ISP says its customers don’t want the service, while another says it’s going to do the same thing while apparently ignoring its entire pricing schedule. All I hear from the potential customers in these newly announced markets is a loud “hallelujah.”

As I said last year, the very presence of Google Fiber and the resonance of a successful deployment will be felt throughout the industry:

In an ideal world, we won’t have to rely on Google to ride into our town to free us from the shackles of our incumbent ISPs. The fact that Google can do this might provide the shakedown the industry desperately needs. Anything that breeds some form of real competition among carriers can only bring faster service, better pricing, and banishment of this nonsense talk about tiering and metering.

There is a very good chance that this might actually come to pass. It can’t come too soon.

This story, “Challenged by Google Fiber, ISPs opt to hasten their downfall,” was originally published at InfoWorld.com. Read more of Paul Venezia’s The Deep End blog at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.