Careful market selection, plus operating cost advantages, arguably are key to all the independent gigabit Internet access provider efforts springing up around the United States. That is as true for Google Fiber as for Rocket Fiber, Ting or any other independent entity.
By definition, capital cost is basically not a source of material advantage: all technology is available to all potential buyers. Construction costs, with some exceptions, also are what they are, for all would-be suppliers. The difference is that some suppliers arguably must use union labor, while others have a choice.
Of all choices, it is the market geography which is most important, at the moment. When Google Fiber decided to build in Portland, Ore., there were no other gigabit ISPs in the market. Now, both CenturyLink and Comcast are doing so, making Google Fiber the possible third supplier in the market.
Some observers think Google Fiber’s decision to delay the Portland, Ore. build, and some in the San Francisco Bay Area, are driven by changing competitive dynamics. Google Fiber arguably once aimed--among other things--to spur key ISPs to upgrade their services.
But now that the ISPs are doing so, it apparently is more difficult for Google Fiber itself to sustain its own operations. Google Fiber arguably has succeeded in getting major U.S. ISPs to boost access speeds. So much so that Google Fiber itself has to rethink its own prospects and business model in many markets, apparently.
In the wake of the Telecommunications Act of 1996, many would-be competitors launched operations where they believed the incumbents would be most vulnerable. For some, that was business customers in tier-two markets. For others, customers in adjacent markets were the obvious targets.
For a brief period, even consumer customers who could be reached using wholesale discounts were viewed as a viable target.
The point is that new gigabit Internet access businesses likely cannot be built "anywhere." Would-be suppliers now must pick their markets, mostly avoiding tougher markets where the incumbents have chosen to upgrade to gigabit speeds.
Market selection always is important for competitive service providers. It likely now is the most-important consideration.