Americans have been asking for faster internet speeds. In an economy that progressively does more and more business online, quicker speeds and rather instant communication helps get things done more quickly. While speeds around the globe are increasing to 1Gbps, Americans have been limited to 1/10th of that, or 100Mbps at the quickest. What’s funny is suppliers like Comcast and Time Warner have shown themselves to be so out of touch as to claim we don’t even want faster speeds. Those claims quickly reversed after Google Fiber and other small municipalities became a hit and started bringing their own 1Gbps service to more towns around the US. Carriers are now being forced to increase speeds to remain relevant, but at what cost to you as the consumer?
Google Fiber made groundbreaking news when it introduced speeds that were over 10x faster than you could purchase before. And to make that more shocking, they did it at an incredible price – $70/mo. Because the groundwork was already laid and the internet is such a crucial part of their revenue flow, they’re even giving away 5Mbps speeds for free. You read that right – free. They charge nothing for a faster connection than you’ll get by paying Comcast’s XFINITY almost $40/mo. The only problem with Google Fiber? it’s only available in select cities around the country (Currently Kansas City, MO & Austin, TX) and mass build out is not coming in the foreseeable future.
This then brings us back to topic. Verizon FIOS, the once touted future of American internet, announced this week they’ll be bringing increased speeds of up to 500Mbps to select communities. At 5x the speed we can currently purchase, it sounds great. Where can we sign up? What wasn’t mentioned was the $310/mo price tag associated with it. You read that correctly – $3,700/yr for internet service. Television service is included in a required “bundle”, but in the age that many of us are turning away from traditional television because we already pay for Netflix or can simply stream shows online, this package doesn’t make sense to many. Verizon will likely find their faster speeds desired by many and purchased by few due to the hefty cost. The thought we’ll pay that because it’s the only thing available nears insulting and proves why there should be more competition in the industry and not less. If the recent talks of duopoly in the cable industry happens, we can expect to see more of this. That would mean regularly higher internet and TV prices for everyone.
On the plus side, start ups are beginning to pop up everywhere. Small companies like Gigabit Seattle, Cedar Falls Utilities, Sonic.net, EPB Fiber Optics, and Google Fiber are providing opportunities of much faster service (up to 10Gbps or 100x faster than what Comcast offers) and at generally lower costs. There are now 11 municipalities across the country providing their own plans to local residents with monthly bills are ranging from $70-150/mo. If this keeps up, major carriers will have no other option but to improve their own options and lower costs.
In the end, major corporations will find themselves backed into the corner unless they begin upgrading networks. It’s what the people want and if acted upon soon provides an opportunity to get out and ahead of other major competitors. The only problem is convincing those competitors to step away from their sky high profit margins and build into the future. Thankfully it looks like underdogs are already on it and trying to help themselves further advance our economy. Score one for the little guy.