Is Google Fiber Internet service driving down Time Warner Cable’s prices?

The Consumerist has an interesting story about this, and other similar stories seem to be popping up.  Google Fiber is a new fiber optic Internet service, along with cable TV, that Google is building, with it’s first test cases in Missouri and Kansas.  Google is offering multiple tiers of service, including a free level.  It sounds rather amazing.  And it seems that suddenly Time Warner Cable has found it in its heart to drop its prices significantly in the areas where Google Fiber is operating.  Imagine that.

As it stands today, Americans pay outrageously high prices for Internet services, yet they still receive low quality. Overseas the competition is much greater, as is the internet speed — and our prices are MUCH lower than what you pay in the states for less service.

Thanks to plenty of friends in Washington, DC, American Internet Service Providers (ISPs, aka the Comcasts of the world) have mostly been able to get away with this lousy deal for consumers, but this may be changing. Unfortunately, Google Fiber is only present in Kansas City today, so the reports of pricing and quality are only there. Secondly, Google Fiber itself is pretty darned expensive.

As I’ve mentioned before, in “socialist” France we have numerous options all around €30 per month, that include high speed internet (including fiber optic, which I have), phone calls around the world at no additional charge and more TV channels than most will ever watch. Other countries in Europe have similar 3-pack deals and Asia reportedly has even better internet connectivity.

As much as the US is the center of the world for many things including leading internet companies, the people of the US are being ripped off with the internet services. (It’s not unlike pharmaceutical prices, which are much more expensive in the US than everywhere else.)

Guy at computer

Computer guy via Shutterstock

Will Google Fiber drive prices down as some have experienced? Maybe. But the US still needs a lot more competition in more places to break the market apart from the stranglehold of a few players.

More from The Consumerist on one customer’s experience in an area where Time Warner Cable now has to compete with Google Fiber:

I’m a Time Warner cable internet subscriber in the KC area, and I got two(!) good pieces of news from them recently.

No. 1. A few weeks ago, they emailed me to tell me that my “Basic Rate” internet service was being upgraded by 50% from 10Mbps to 15Mbps, effective at the next restart of my cable modem. I haven’t tested this — that only occurred to me in retrospect — but it sounds great.

No. 2. My latest cable bill was ~30% lower than the previous month. $29.99 vs. $44.94, for a savings — by their calculation — “of $23.96 this month.” My calculation is slightly different, I get a savings of $14.95, but lower is better. The line item has the note: “Enjoy your savings of $23.96 by subscribing to this package. (Offer expires 11/29/2014)” It doesn’t say anything about me having to do anything to get this rate, and the “package” they mention is the one I assumed I was using already. But the bill says $29.99, so that’s what I’m putting on the check.

Surprise, surprise.  Funny thing, that free market.  When there actually is real competition, the thing actually works.

An American in Paris, France. BA in History & Political Science from Ohio State. Provided consulting services to US software startups, launching new business overseas that have both IPO’d and sold to well-known global software companies. Currently launching a new cloud-based startup. Full bio here.

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15 Responses to “Is Google Fiber Internet service driving down Time Warner Cable’s prices?”

  1. skylights says:

    “Google Fiber itself is pretty darned expensive.”

    Really? Free (+install fee) unlimited 5 Mb/s Internet for seven years is expensive? Gigabit for $70/mo is expensive? Gb+cable for $120/mo is expensive? Maybe it’s expensive compared to some countries, but for the U.S. it’s great. Compare it to Chattanooga, which has Gigabit Internet but charges $300/mo. That’s expensive.

  2. Jmg1andonly says:

    I would happily cancel my service, but no one else would do the same. If more people would refuse to pay these ridiculous and high prices we wouldn’t have this problem.

    The reason is because we live in a country where everyone wants to “be rich”, but in reality they act rich. No one demands lower prices, everyone sits back and either pays it, or doesn’t care to throw money down the drain to these big companies.

  3. davidmhoffman says:

    Yes. The big issue is that Google has to build in a short period of time what other companies did over a few decades. Advanced fiber optic technology can help reduce the effect of that issue, but it does not eliminate it. If your municipality happens to have enough unused fiber optic strands or dark fiber that Google Fiber can use, that can reduce the effect of that issue.

  4. BeccaM says:

    Yeah, and a generous portion of denial, because people here really don’t want to contemplate the possibility (much less the objective reality) that there are more advanced, better educated, and more pleasant countries to live in.

  5. Naja pallida says:

    There was a time when American exceptionalism had a grain of truth to it… but these days, it’s pretty much just based on ignorance.

  6. Stentor7 says:

    That would really kick Time-Warner in the breadbasket, they have a near-monopoly out here ever since the asset swap with Comcast.

  7. karmanot says:

    I’ve always considered diamonds as capitalist rhinestones.

  8. Jonas Grumby says:

    It’s their moronic love affair with Capitalism … whose goal is to restrict choice and availability so that high prices can be charged. Capitalism doesn’t survive by providing a surplus. De Beers anyone?

  9. Jonas Grumby says:

    Come to L.A. Google fiber!!!

  10. dlrich00 says:

    I’m a Comcast customer in Atlanta. I have signed up for updates to let me know when Google Fiber comes in the area. Right now, I’m pay $100 for stuff I rarely watch. I’m trying out Hulu and find it just as good if not better than my cable options for Comcast. I hope Google’s roll out is quick.

  11. Matt Munson says:

    Can Google Fiber be in the same markets as Verizon Fios?

  12. BeccaM says:

    I also think it’s a direct side-effect of American exceptionalism, from the belief so many uninformed Americans have that everything here is inherently superior to the rest of the world.

  13. dddavid says:

    Why do Americans get screwed? Apparently because they enjoy it! It is because of Americans price insensitivity that prices are so high on cable, internet, cellphone, etc… “How much does it cost? Oh, that’s outrageous! OK, I guess I have to pay that.” If more people would cancel their service then prices would come down.

  14. BeccaM says:

    True enough, but one of the reasons it seems necessary to have ala carte is because it’s only the high-end packages that have all the really good channels and they cost too damned much. If we were paying the equivalent of 30 Euros/month for ultra high speed internet, worldwide phone service, AND a bazillion TV channels, most of us wouldn’t care if we could shave a couple Euros off that by not taking some sports or religious channels.

  15. AdmNaismith says:

    Internet is only half of it. Yes, the speeds and need to go up and the price neess to go down. But I’m also paying for a baker’s dozen of very expensive ESPNs I will never watch. And here in LA, TW wants me to subsidize a new Dodger Channel (to go with the Laker Channel I am already not watching but still have to pay for).
    Pricing for sports channels is way different than for other channels. Those fees go directly to teams and players. Betty White doesn’t get a direct cut of TV Land subscription fees.

    Until the consumer can get a la carte pricing (or a better menu than Basic, Intermediate, and Everything), pricing for cable services will still be f*cked.

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