Google Fiber Now Seeks to Further Disrupt "Spectrum in a Waveguide"

We often forget that “capacity” is consumed by customers in several different ways. Some times, as with mobile, Wi-Fi or cable TV services, over the air spectrum is used.

In other cases, spectrum-based delivery systems (radio frequency carriers in the case of cable hybrid fiber coax) are used.

In essence, cable TV transmission systems use radio frequencies, but confined to a waveguide. And, for the first time, Googe Fiber is going to broaden its product portfolio, using a multi-tier system similar to that used by telcos and cable TV Internet service providers.

There are lots of ways to disrupt a market, and Google Fiber now is going to take the new tack for disrupting high speed access markets in the Atlanta region, where Comcast and AT&T already have been deploying gigabit networks of their own.

Google Fiber now will attempt to reset consumer expectations, not just for gigabit services, but now for services at 100 Mbps.

In Atlanta, there will be a new 100-Mbps tier of service, sold for $50 a month.

The new $50 plan will likely be quite important, for several reasons. For starters, many users will understand that 100 Mbps suits all their requirements, even if a gigabit is deemed “better.” But “better” also costs more.

That should broaden Google Fiber appeal more than in the past, where the option has been “pay $70 for a gigabit” or buy from another service provider.

Now Google Fiber will be able to directly attack the broad middle of the market with an offer than offers more value than the competing offers from AT&T and Comcast.

As other ISPs have found, consumers often do not buy the most-expensive tier of services, instead choosing other moderate-speed options that satisfy their requirements. That might be 20 Mbps for some, 40 Mbps for many, or 100 Mbps for lots of people.

Up to this point, Google Fiber has not been able to gauge the extent of demand for speeds far lower than a gigabit, but in triple digits. Atlanta will be its first chance to find out how important that tier is, in terms of customer demand.

Significantly, the $40 tier, offering 100 Mbps, is going to compare favorably, one might argue, with Comcast and AT&T offers in the Atlanta market.

Comcast sells a 2-Gbps symmetrical service for $300 a month. Comcast also sells service of 150 megabits for $130 a month and 250 megabits for $150 a month.

AT&T sells (on an initial promotional basis), U-verse 1 Gbps starting as low as $120 a month, or speeds at 100 Mbps as low as $90 a month, at least for the first year.

Since potential buyers typically will compare local offers, Google Fiber’s new $50 for 100 Mbps offer might appeal to many consumers who see Comcast and AT&T selling that level of service for triple digits.

As would any competent Internet service provider, Google Fiber takes note of what has worked in the past, and the local characteristics of each new market. In Atlanta, for example, Google Fiber will make two changes to the packaging and pricing plans it originally offered in Kansas City and other markets.

In Atlanta, it does not appear there is a “free” 5 Mbps offer (after the customer paid a $300 connection fee).

The $130 video plus gigabit access, as well as the $70 a month gigabit Internet access plans will be available as well.