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Google Fiber is something pay TV operators should be “very, very afraid of,” said research group SNL Kagan. “Google is reinventing the business of pay TV and broadband — and it may not need to wire every US city to make an impact,” wrote SNL Kagan analys Deborah Yao, in the report’s lead.
Two weeks ago, in Kansas City, Mo., Google launched a new fiber-based broadband and video service. For $120 a month, subscribers get uncapped internet access that’s 172 times faster than the national average. They get a 2 terabyte DVR, capable of recording up to 500 hours of programming and eight shows at one time. And they get an as yet incomplete but growing selection of basic cable channels, albeit one that currently lacks such powerful draws as Disney’s ESPN, News Corp.’s Fox News and AMC.
SNL Kagan implies Google — which spent $500 million to bring its Fiber to Kansas City — might try and roll it out nationally if it believes it can extract a $300 a home connection charge as it has in Kansas. SNL Kagan added that Google cut expenses by building its own set tops and running its fiber over aerial power lines instead of cutting them into the ground.
“One could argue that Google may not have to wire every US city, but just enough cities for pay TV operators to start changing their behaviour… As Google proves that it can offer a superior product at lower prices, regulators could pressure cable and telecom operators to do the same,” says SNL Kagan.