Google Fiber: expansion predictions and effects concerning Houston
Google Fiber is arguably the best internet in the country right now.
The difficulty for businesses to compete with 1000 MB upload and download for $70 per month cannot be understated. However, many problems in the internet industry are explained by a lack of competition from the top-down. Three of the top internet providers in the country hold around 63 percent of the internet market.
The concentration of consumers in top-level firms in this industry raises prices and lowers speeds.
These maps perfectly illustrate problems within the industry. The largest internet providers more or less carve out their territory, and because of the large consumer base, internet in big cities might remain subpar.
Google Fiber serves not only as an excellent choice for individual internet, but as a local monopoly–buster. The more competition within an area of internet service, the faster the speeds and the lower the prices. The industry is especially sensitive to competition due to artificial depression of internet speeds and providers‘ faulty marketing.
If Comcast wanted to offer gigabyte internet for cheap, they could. However, because of the lack of local competition, they do not have to diminish their profits through providing better service.
The regulation of internet marketing lags behind as well. The reason your internet only goes 15 Mbps when you bought 50 Mbps is because the provider is technically telling you the maximum download rate, while your effective rate is much lower.
Where does Houston come into this? Houston, in terms of internet speed across the city, ranks mediocre at best, and with Google Fiber expanding in recent years, one would think Houston is a prime choice for Google.
Houston is a rare gem
because it does not have any zoning laws. This means people are allowed to construct more freely within the city limits.
Therefore, Google would not have a particularly hard time laying the necessary fiber. Unfortunately, Houston has far too many areas locked in long–term internet contracts, meaning even if Google Fiber came to Houston, the coverage would be sparse.
The lack of motivation from Google also comes from their expansion philosophy. Generally, Google does not want to enter areas with too many people. The largest city in their upcoming expansion is San Antonio, which has about 800,000 less people than Houston.
Part of the expansion process for Google is negotiating with local governments to ensure the smoothest and best implementation for themselves. Relatively smaller cities retain less leverage in negotiations because of their smaller consumer base compared to larger cities like New York or Los Angeles.
Google Fiber is exactly what Houston needs to fire up the internet industry. The only way this will happen is through contract reforms and city council support. Google Fiber would be a big win even if some areas are not serviced because it would pressure other providers to offer better service.
Opinion columnist Cameron Barrett is an economics senior and can be reached at [email protected].