Comcast's New Internet Service Crushes Google Fiber

By Markets Fool.com

Google Fiber has finally met its match.

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Comcast's new Internet service absolutely crushes Google's offering, with speeds twice as fast. Comcast will begin rolling out the service next month in Atlanta, and plans to bring it to its other markets over time.



Source: Comcast

More important than its Google Fiber killer is its Google Fiber competitor -- Comcast says it will be able to offer almost all of its subscribers 1Gbps service sometime next year.

Rather than fret, Google shareholders should welcome this development, as better broadband connections will benefit its online services.

Comcast's new service
Comcast has been offering business customers multi-gigabit Internet connections for several years, but has yet to bring those speeds to consumers. Many Comcast customers have access to download speeds over 100 Mbps -- and some in select cities can get 505 Mbps connections -- but that's still noticeably slower than Google Fiber, which offers download speeds of around 1000 Mbps.

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Comcast's current offerings also pale in comparison when it comes to upload speeds. Google Fiber is symmetrical -- users can upload files just as fast as they can download them. Comcast, however, offers much slower upload speeds: a subscriber on a 105 Mbps download plan, for example, may only get around 25 Mbps of upload speed. But Comcast's new offering will also be symmetrical. Comcast customers living in Atlanta will be able to upload and download at up to 2 Gbps.

For those who don't live in Atlanta, Comcast plans to offer 1Gbps plans to almost all of its Internet subscribers in 2016. That amounts to tens of millions of American homes -- Comcast competes in many of the largest U.S. markets, and has more than 20 million Internet subscribers.

Google should cheer Comcast's fiber
Comcast's announcement obviously poses a competitive threat to Google Fiber, but as a whole, should be very beneficial to Google's business. Google Fiber, while exciting, remains a minuscule offering for the search giant. Google continues to derive the overwhelming majority of its revenue from online advertising, and though it plans to bring Fiber to as many as a dozen major cities, it is unlikely that it will ever be a major player in the telecom business.

In its most recent 10-K, Google never mentions Fiber, though it does list lack of quality broadband connections as a serious risk factor, writing that "our products and services depend on the ability of our users to access the Internet, and certain of our products require significant bandwidth to work effectively."

The better the Internet, the more likely people are to use it. And given that Google owns many of the Internet's most popular services and properties -- including Google search, Gmail, and YouTube -- that probably means more time spent with Google.

Many of Google's current services would benefit from its users having better quality Internet. With a 1 Gbps connection, it's much easier to watch (or upload) high-quality YouTube videos. Cloud services and software, such as Google Docs and Google Drive, perform better and become more useful. At the same time, in much the same way that the jump to broadband made streaming Internet video possible, new Google products -- ones currently unimaginable -- could become possible.

Unfortunately, Comcast hasn't announced many key details of its new service just yet -- how much will it cost? When will it begin its 1Gbps roll-out? But it's clear that American broadband is headed in the right direction -- and that's a great thing for Google shareholders.

The article Comcast's New Internet Service Crushes Google Fiber originally appeared on Fool.com.

Sam Mattera has no position in any stocks mentioned. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.