Thursday, July 26, 2012
Google announced on Thursday that it will get into the cable TV business, saying its previously announced build-out of a fiber-optic network in Kansas City, Kansas, and neighboring Kansas City, Missouri, will include television as well as high-speed Internet services.
The move is a direct challenge to high-speed Internet and cable TV providers, who have long enjoyed a monopoly on their services in many communities across the country, and typically offer much slower Internet access speeds. And it could represent a major business expansion for the search giant—even though Google has painted the buildup as more of a charity project meant to drive tech innovation and get more people surfing the Web at higher speeds.
Google's services will cost $70 per month for Internet access with speeds of up to a gigabit per second—which, Google says, is 100 times faster than the average American's existing broadband connection—or $120 for Internet plus a cable TV offering that gives people the ability to control the TV from and watch on an included Nexus 7 tablet computer. The company also plans to give Internet access at typical broadband speeds for a one-time $300 fee.
Unlike dial-up or coaxial cable networks, building a fiber-optic network requires the laying of thousands of miles of glass-fiber cables, which are then routed to homes. Data can travel much, much faster over these glass-fiber cables than over traditional networks. Though one-gigabit Internet service is available in some places, it's costly and not generally a service that consumers can purchase.
Google has been working on the rollout of its network since early 2010, when it announced that it would be building high-speed broadband networks in the United States. Almost 1,100 communities vied to be the first city to receive the service, with Kansas City, Kansas, emerging as the winner. The service is also being offered in neighboring Kansas City, Missouri. Google has not yet said where it will build its next fiber network. Milo Medin, Google's vice president of access services, says the Internet service will have no monthly volume caps or overage charges.
A survey Google conducted in Kansas City showed that 17 percent of residents don't use the Internet, while 8 percent use dial-up or what Google termed "slow speed wireless connections." The company plans to make the service available before the end of the year. Kevin Lo, general manager of Google Access, says installations will begin after Sept. 9.