Broadband speeds have lagged in the United States, offering slower speeds for higher prices compared to most first world countries. The U.S. ranks 9th for speed and 21st for price. Broadband providers have claimed people are using too much bandwidth, leading to data caps, reduced speeds, and other limitations.
Time Warner Cable, one of the first companies to test data caps on customers, has miraculously increased speeds and cut prices for a least one customer. Consumerist reports a Kansas City customer received an email increasing his broadband speed 50% and lowering his monthly bill by 30 percent. While its great to see a company lowering prices and providing more functionality, the reasoning behind it reveals ulterior motives. Specifically, Google launched its own fiber optic internet service in Kansas City, offering 1 gigabit of speed (compared to a national average of 6.6 megabits) for a slightly higher monthly rate and offering free 5 megabit internet (which is the standard paid version from most broadband providers).
I and others have argued the dismal state of U.S. broadband is due to a lack of competition. In most markets, consumers have at most two choices for their internet service. Even in major cities, customers are locked into one option (like myself) where if we are unhappy with our speed and price, we have no option to switch. Once a competitor enters the space, in this case Google, Time Warner finds it now has to compete for customers. No longer can it offer poor service for a high price simply because it has a monopoly on customers. Claims of data congestion or over usage seem much weaker.
There is speculation on whether Google intends to roll out its fiber service nationally, as that would be extremely expensive. Others suspect Google is simply showing up broadband providers, forcing them to improve their service (and show its technologically feasible and affordable to do so). I lean more to the latter opinion. Google favors a world where people use the internet more and faster. Further, Google wants to be able to offer more services using the internet, and faster speeds make that a possibilities – showing more ads along the way. As consumers, even if we may be wary of Google controlling more of our internet experience, we should be happy to see someone challenging the incumbent players who have so limited our internet experience thus far. Competition improves services and lowers prices. Hopefully we’ll see more of this.