Google Inc (GOOG): How The Tech Giant Hopes to Liberate The US From Cable Captivity

AT&T currently operates a hybrid U-verse network in Austin; it runs fiber optic cables through neighborhoods but then runs copper from the main line to the house. I switched from U-verse to Time Warner Cable years ago because of some performance issues I was experiencing. Two weeks ago, the company sent someone to try to win me back to U-verse. My response? “Come back when you build a full fiber network, and I’d switch.” This is a true story; maybe I should prepare for another visit.

The net result of the competition will be that consumers eventually get much faster connections, and monthly bills will only moderately increase. Any way you slice it, the consumer wins.

Patience is a virtue
Still, Google’s liberation is going to take time. Between Kansas City and Austin, that’s only 1.4 million people in those metropolitan areas, or less than 0.5% of the 315 million Americans in the United States. Even within those cities, not everyone is covered, and the rollout is slow and expensive.

Analysts estimate that Google’s first wave of network investment will run $84 million to reach almost 150,000 homes in Kansas City this year. A larger-scale expansion to 300,000 homes could double costs to around $170 million. A nationwide rollout could cost up to $11 billion. Google didn’t specify where it would start in Austin but said it would begin gauging interest and start with high-interest neighborhoods.

It’s now been more than two years since Google’s first Google Fiber announcement. With only two areas on the list, perhaps wired cable providers don’t think the threat is imminent. Perhaps they’re right. Consumers need to start speaking out against slow speeds and high prices in order to catalyze change.

Give me liberty, or give me gigabit fiber optic service.

The article How Google Hopes to Liberate America From Cable Captivity originally appeared on Fool.com.

Fool contributor Evan Niu, CFA, owns shares of Verizon Communications (NYSE:VZ). The Motley Fool recommends and owns shares of Google.

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