Wednesday, September 11, 2013
Google Fiber and inequality
Google's recent fiber program is coming to Provo soon. The lowest 100 megabit tier is practically free (7 years for $300). So why is it free, and why in Provo? The simplest and most obvious answer is, "it makes Google money". Google sells advertisements through passive views and clicks; more people on the Internet means more money for Google. Google might be losing a lot of money on Google Fiber, but delivering free advertising for a minimum of 7 years is an excellent investment. Google, being a rational company, seems to be choosing Google Fiber cities where people are 1) most likely to use internet, and 2) most likely to appeal to Google's advertisers. Provo is full of college students and large middle-class families who are excellent targets for advertisers. But then this begs another question: "what about communities that don't appeal to Google's advertisers, and what are they supposed to do to compensate for not having fiber internet in the coming decades?"
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Personally, I think they are mostly testing demographics in areas where it is cheapest for them to install. Kansas was likely very cheap for them to install, and Austin and Provo are college towns that already had fiber networks. I really believe that if they find it lucrative enough, Google has the power to monopolize internet service. I can't decide if that is scary or exciting.
ReplyDeleteIt is a good question. It will be interesting to see how Google Fiber shifts the market for internet. Hopefully, there will still be healthy competition.
ReplyDeleteJust like ruben said, Google was just eating up companies that managed fiber networks and improving on their service. It's capitalism. But I think it is awesome that Google is undercutting the absurd monthly cost of internet and putting those companies out. The age we live in internet should be free and I don't mind the advertisements as long as they don't impede my work.
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