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Comcast and Time Warner Should be Terrified of Google Fiber, Internet Users Should Rejoice - Motley Fool

By Chris Neiger

When Google (NASDAQ: GOOGL  ) (NASDAQ: GOOGL  )  launched its fiber Internet network, Google Fiber, it was clear that one possible impact would be increased competition in the notoriously noncompetitive home Internet space.

And that's exactly what happened.

In Kansas City, one of Google Fiber's first locations, both Time Warner Cable (NYSE: TWC  ) and Comcast (NASDAQ: CMCSK  ) bumped up their Internet speeds this week -- sometimes by more than double -- while keeping the same monthly price.

As the Kansas City Star reported, Comcast is doubling speeds for two of its packages and upping another package by nearly 50%. The top upgrade for Comcast will take Internet speed from 105 megabits per second to 150 Mbps in the city, while Google Fiber hits 1,000 megabits per second, or 1Gbps.

Google offers its 1Gbps service for just $70 per month. For half that speed, Comcast charges about $400 per month in most of its markets.

As the Star noted, Comcast offered similar upgrades in California and Texas before it brought the higher speeds to Kanas City. Google Fiber had been closed to new customers in Kansas City for a while, but a few weeks ago the company reopened sign-ups for its fiber service through the beginning of August -- giving Time Warner and Comcast a big incentive to increase Internet speeds for existing customers.

The bigger picture
Time Warner Cable today holds about 13% of the U.S. home broadband market, while Comcast has 24%. The two companies are in the middle of merger talks, with Comcast offering to buy Time Warner Cable for $45 billion in stock. That would give the merged company a combined U.S. Internet home service market share of 37%.

Even if a deal isn't reached, these cable giants face no immediate threat from Google Fiber. But that could easily change as Google moves into new cities. ...more

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