Will Incumbents Win Gigabit War in Austin?

If Google Fiber was an effort to spur faster investment by major U.S. Internet service providers, that gambit is succeeding. In Austin, where Google Fiber announced in 2013 it was going to build a symmetrical 1-Gbps Internet access network, progress arguably has been slow.

“So far most of our installs are in apartments,” in two neighborhoods, said Mark Strama, head of Google Fiber Austin.

AT&T, Grande Communications and Time Warner Cable also have announced or begun to implement much-faster access services. Both AT&T and Grande have said they will offer gigabit services in some neighborhoods where there is demand.

So Google Fiber already is succeeding, to the extent part of its mission is to spur competitive upgrades. But Google Fiber might not be moving fast enough to head off preemptive moves by its main competitors in the Austin market.

Ironically, a company known for moving fast is not moving fast enough to gain market share before its competitors have crafted their own competitive offers.

For Google Fiber, which essentially offers only one retail offer, uptake of gigabit services matters.

For the other competitors, which offer packages at a range of speeds, what will matter is retained customer base, on any retail package, not the uptake of gigabit offers.

In other words, for AT&T, Grande or Time Warner Cable, if the upgrade projects simply allow the incumbents to maintain current share, they win, at some level, even if they have been forced to spend more money on infrastructure.

Consumers will win. Google Fiber will have achieved a strategic objective. And even the incumbent ISPs might “win” if their own competitive offers manage to stave off customer chrun to Google Fiber.
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