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JPL
Premium
join:2007-04-04
Downingtown, PA
kudos:4
reply to Telco

Re: Will you save money?

said by Telco:

It's already happening actually. I'd love to see all of those who claimed that Google FTTH is expensive, come here and explain the $74.95 for a 25/4 Comcast service starting today. That's $4.95 more already and does not include Comcast's other BS fees, for a fraction of the service.

BTW Have you ever noticed what they pay and receive in other Big Gov nations (exc Canada).

Two words to describe this: 'loss leader'. Google Fiber is cheap because they haven't passed on the full cost of operation to consumers yet. All new business start-ups start this way. When a new hair place opened up by my house, they were offering hair cuts for $8. More than 50% less than the competition. Think they're still only charging $8? Of course not. The price is right in line now with everyone else around them. What they offered initially was a promo price - it wasn't designed to earn a profit. It was designed to create flow - make you go into the store to try them out.

Again, this is nothing new. Amazon existed for probably 6 years before they turned a profit (heck, they still incur a loss for every Kindle Fire sold - expecting to make it up on you buying material to go on your Kindle). Verizon inititally really under-priced FiOS. Eventually the R&D gets paid off, though, and you've established a customer base. At that point you need to move into the black. Which means that you have to operate with a positive cash flow.

You can't make the assessment that Google Fiber is 'cheap' because you don't yet know what it will ultimately be priced for when it gets to that positive cash flow stage. My guess - it'll be right in line with everyone else in the market - and probably higher. I know the price of fiber has dropped, but it's still MUCH more expensive than laying coax. Installation alone for fiber is probably 2 to 3 times what the installation cost is for coax (cost of running service to a new home).

And the cost in those 'big government nations' is hidden. Ok, you don't pay as much for monthly service on some things. But if you're willing to incur a marginal tax rate of 90%... go right ahead. The point is - you're still paying for it. It's just not going directly to the company. You make it up (and then some - since government is far from the most efficient conduit of spending) in taxes.
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