Google Inc made its foray into the market for bundled Internet and television services on Thursday, promising access speeds more than 100 times faster than those of traditional U.S. cable and telecommunications companies. By Carey Gillam and Yinka Adegoke.
The Web search leader unveiled its ultra-high speed Google Fiber service in Kansas City, Missouri, and could start installations in September, executives said. Google hopes to roll out the service to other cities later.
“Access is the next frontier that needs to be opened,” Google Chief Financial Officer Patrick Pichette said. “We’re going to do it profitably. That is our plan.”
“We are at a crossroad,” he added, noting that Internet speeds had leveled out for broadband since around 2000. “We at Google we believe there is no need to wait.”
Google Fiber’s ultra high-speed connections and television offerings are aimed at surpassing those of current providers, allowing users to search live channels, Netflix, YouTube, recorded shows and tens of thousands of hours of on-demand programming. However, no phone service is available.
“The phone is really a 1940s thing. Why have a landline? It’s sitting there, you use it once every two weeks,” Pichette said.
Google said it also intends to roll out product packages for businesses, but would not provide details.
Google Fiber includes more than 100 networks and costs $120 a month for a package of TV, 1 gigabyte per second Internet speeds and 1 terabyte of cloud storage.
The package includes popular networks owned by major media companies such as Comcast Corp’s NBC Universal, Discovery Communications and Viacom Inc. Premium movie networks are available from Liberty Media’s Starz for an extra fee.
But it excludes several major TV names, such as News Corp’s Fox cable channels; Time Warner networks like CNN, TNT and TBS, as well as Walt Disney Co cable channels like ESPN and Disney children networks.
Google executives said the company is still in negotiations to add more content.
“They need to be able to offer something that is everything people have now and more,” said Ben Schachter, an analyst with Macquarie Research.
“People are going to have high expectations for this. The worst thing they can do is come out and disappoint.”
Google is also offering an Internet-only package priced at $70 a month. The download speeds would be around 1 gigabyte a second, according to Google executives.
Google is charging a $300 installation fee, saying consumers should treat it as a “home improvement” cost.
The initial service area includes central Kansas City, Missouri and all of the city of neighboring Kansas City, Kansas.
This market is dominated by Time Warner Cable Inc, which charges $99.95 for its fastest Internet-only service there. Google Fiber would be 20 times faster.
Time Warner spokesman Justin Venech said the second largest U.S. cable operator had a “robust and adaptable network” and welcomed the competition.
FEATURES AND FREEBIE
Google Fiber includes such features as the ability to record eight TV shows at a time and store up to 500 hours of high definition programming. Users can choose to use a tablet or smartphone as a voice-activated remote control.
Google is offering its Nexus 7 tablet with the Google TV app to early users of the service.
Google said it is setting up a 6-week “rally” for consumers to vote on where the first fiber communities, or “fiberhoods,” should be installed in the Kansas City area.
Consumers must pay $10 to register their household online for service. About 50 “neighbors” will need to register in order for their area to be eligible for installation services, according to Google executives.
Whether or not consumers will embrace the new offerings remains to be seen. But officials said they are confident Kansas City will be a showcase of success for a larger rollout.
“Google is a very different company,” said Kevin Lo, general manager of Google Access. “And this is not a short-term project.” DM
Photo by Reuters.
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