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Time Warner Makes Feeble Attempt to Counter Google Fiber Buzz
How Long Will Company Resist Actually Competing Through Price Cuts?
by Karl Bode 12:55PM Thursday Nov 29 2012
Time Warner Cable today made a fairly tepid attempt to counter some of the constant positive press Google is receiving for Google Fiber, announcing that Kansas City residents now have access to free Wi-Fi (if they're a subscriber) and discount broadband (if they're a low income family). Time Warner Cable held a press event in Kansas City today to announce that their network of Wi-Fi hotspots has expanded to Kansas City, as well as their $10 Starter Internet package aimed at low-income homes.

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The announcement comes as Time Warner Cable finds itself in the unfamiliar position of having to compete. Neither initiative is new, and neither really does much to counter Google's competitive karate chop to the center of the cable giant's forehead.

While the Wi-Fi initiative is certainly welcome, it has become a fairly standard part of cable service in many markets. In contrast, Google is offering free Wi-Fi to many locations regardless of whether you're a Google Fiber customer or not.

Similarly, while the symmetrical 1 Mbps $10 Starter Internet package (mirrored on an offer Comcast proposed to get regulatory approval for their NBC acquisition) sounds nice, it's only offered in some school districts, and like the Comcast offer is a show pony with enough caveats (pdf) that Time Warner Cable knows many, many families won't qualify. In contrast, Google's offering users a 5 Mbps connection over FTTH for "free," after you pay a $300 install fee. That fee can be paid in installments of $25 for a year, after which you don't pay a dime.

So far, Time Warner Cable's engaging in the kind of theatrics they can pass off as "competing" in other markets, but which aren't likely to work in Kansas City. Time Warner Cable's largest effort to counter Google Fiber? Trying to lock customers into long-term contracts so they can't sign up for the speedy service without facing a stiff penalty. To retain customers Time Warner Cable's going to need engage in more than theatrics, they're going to have to raise local speeds and lower the price. It should be amusing to see just how long Time Warner Cable executives try to put off both.

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Google fired a shot across the bow

Yesterday's post regarding Google Fiber had the most telling quote in it:

»Ars Realizes Internet Can't Keep Up With Google Fiber

"You've in essence removed a bottleneck that the Internet isn't yet structured to deal with being removed. Having that much pipe means you're basically plugging your computer directly into the thing you're downloading from. Your own bandwidth is so great that it becomes immaterial. It becomes a question of how much bandwidth the other side has available."
In reality, Google has said very little regarding the service other than "we're going to deliver fiber-based services to a selected area". Anything else that's been mentioned regarding it has been speculation based upon analysis of how the project priced, delivered and performed.

That said, Google's pricing a service at a nearly negligible cost is doing two major things:

1) Putting billions of dollars behind the belief that the consumer's attention is worth more then the investment. Essentially, they're force feeding a HUGE spoon to the base they reach and showing advertisers, "look, if you want their attention...send it down my pipes and you'll make money."

2) They're upsetting the model that people buy "services" for the sake of having "services." Residential customers don't buy electricity for the purpose of saying, "look, I have electricity!" They purchase it to consume products that benefit from having electric access. By almost giving away the access needed consume tv and online products, Google is removing any reason customers may have for conducting even more of their lives outside of their infrastructure....or those companies also benefit from Google's business interests.

They're a complete mind-shift that entrenched providers are not ready to compete against.