Why Is Google Fiber the Country’s Only Super-Speed Internet?

Google Fiber was supposed to be a shaming exercise. But any shame felt by the country’s big-name ISPs has yet to produce the sort of ultra-high-speed internet services we’ve all been hoping for.

In 2010, Google announced that it would bring a 1,000 megabit (1 gigabit) per second fiber internet service to one lucky American city. That’s one gigabit per second streaming across the wire — or about 10 times the speed you’re used to and more than three times the speed you’d get from Verizon’s existing 300 megabit per second fiber optic service, FiOS.

The search giant insisted it had no intention of becoming an internet service provider. It just wanted to encourage existing ISPs, including Verizon, to run higher speed lines across the country. But although Google Fiber has now arrived in Kansas City, Missouri, the big name ISPs aren’t exactly following suit.

Verizon has stalled the expansion of FiOS indefinitely, and other companies have been slow to invest in ultrafast broadband. Time Warner Cable is rolling out fiber to office building in New York City, and Comcast’s Xfinity Platinum service offers a 305 megabit cable service in some locations for $299.95, but that’s the extent of it.

The good news is that local communities are now trying to trying to find other ways to bring higher speed internet to their citizens at affordable rates. Chicago and Seattle, for example, have both announced partnerships with a new broadband provider called Gigabit Squared to bring fiber internet connections to residents.

Why are things moving so slowly? With communities eager for fiber internet, why aren’t the established broadband companies doing more to bring these services to more cities? The answer is, yes, money.

Verizon began offering fiber internet connections in some states back in 2005 and puts its investment in the network at $23 billion. But some have questioned this claim, and investors have been uneasy about this spending all along. The company confirmed earlier this year that it would not expand its service to other states or even roll out to additional neighborhoods.

“Competitors have been overbuilding, investors are wondering where the returns are,” says Mark Ansboury, president and co-founder of GigaBit Squared. “What you’re seeing is an entrenchment, companies leveraging what they already have in play.”

Karl Bode, an ISP industry watcher and author of a the blog DSL Reports, believes Verizon has had a change of heart. “I think ex-Verizon CEO Ivan Seidenberg was very bullish on fiber,” he says. “But after retirement, he was replaced by executives who wanted to focus more heavily on wireless, given the lower cost of deployment and the absolute killing that can be made charging users a significant amount per gigabyte.”

But he also blames the money men. “Investors in this country are simply too myopic to wait the required length of time to see adequate returns,” Bode says. “These services are certainly profitable, they’re just not profitable enough quickly enough for short-sighted investors.”

Verizon is neglecting not just FiOS, but all of its other fixed line services in favor of wireless services, according to Bode.
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