It looks as if Google (Nasdaq: GOOG) has set the going rate for gigabit broadband service.
Service providers using the open-access Utah Telecommunication Open Infrastructure Agency (UTOPIA) fiber network in Utah, along with EPB Fiber Optics in Chattanooga, Tenn., are all dropping the rates on their 1Gbit/s service offerings to $70 per month or less. That price roughly matches the Google Fiber Inc. high-speed Internet tier in the Kansas City region and suggests that gigabit service could be commercially viable in residential markets.
Cable companies have long argued that consumers don't need gigabit speeds. But proponents of such high-capacity networks point to increased Internet usage and emerging applications as evidence that the demand exists.
Utopia highlights streaming video, distance learning, and video conferencing as the leading reasons for upgrading to 1Gbit/s service. EPB touts the economic development advantages of high-speed Internet and the culture of innovation that it creates. Beyond the residential service market, EPB also runs its power utility smart grid on the local gigabit network.
Most gigabit providers are also using TV service to generate revenue from their high-speed data networks. (See: Deutsche Telekom Tests Set-Top Virtualization.)
Cable companies aren't going for 1 gig yet, but they are moving in that direction. Comcast Corp. (Nasdaq: CMCSA, CMCSK) just bumped up its top-tier broadband service to 505 Mbit/s downstream and 105 Mbit/s upstream, while Verizon Communications Inc. (NYSE: VZ) made a similar upgrade to 500 Mbit/s downstream and 100 Mbit/s upstream in July. Unlike Google Fiber, however, Comcast and Verizon are charging upwards of $300 per month. (See: FiOS 500 Leaves Cable in Dust.)
— Mari Silbey, special to Light Reading Cable