Comcast's new Internet service is twice as fast asGoogle Fiber.
The service, known as Gigabit Pro, boasts speeds of up to 2Gbps (compared to just 1Gbps for Google Fiber). It's expensive, and limited to select geographic regions, but it serves to highlight the continued advances in connectivity -- progress that should ultimately benefit Google shareholders.
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80 times faster than broadbandAt 2Gbps, Comcast's Gigabit Pro is 80 times faster than the 25Mbps broadband threshold established by the FCC earlier this year, and 500 times faster than the previous 4Mbps standard. Last month, in its quarterly State of the Internet report,Akamai Technologies reported that of the 50 states, Delaware had the highest average peak connection speed, coming in at 85.6Mbps. Gigabit Pro is more than 23 times faster.
Unfortunately, at $300 per month, Comcast's blazing-fast service is extremely expensive. Internet pricing varies significantly across the U.S., but Comcast's standard Internet plans typically start at around $20 per month. Google Fiber is $70.
At the same time, Gigabit Pro is limited to just seven U.S. states, and within those states, a handful of metropolitan areas. To its credit, Comcast plans to expand Gigabit Pro's availability over time, and previously said it would offer all of its Internet subscribers at least 1Gbps speeds by the end of next year.
Increasing its speeds should keep its existing Internet subscribers loyal. Comcast now has 22.6 million of them, more than its 22.3 million paid-TV subscribers. It might also allow the company to expand its offerings, branching out into completely new areas. Earlier this month, Comcast unveiled a partnership with video game giant Electronic Arts, one that allows it to stream EA's games directly to its subscribers' cable set-top boxes. This service wouldn't be feasible without a speedy broadband connection, and faster connections may make new services possible in the future.A battle Google would love to loseComcast's Gigabit Pro will compete directly with Google Fiber in at least two markets (Atlanta and Nashville), and likely more over time. Comcast's service, then, poses something of a competitive threat to Google Fiber, but it's not something that should worry Google shareholders.
In fact, the opposite is likely true. Google is a search giant, not a telecom -- Fiber is insignificant to the company's earnings. More than 94% of Google's revenue came from advertising last quarter. During the company's earnings call, Google's CFO Ruth Porat mentioned Fiber only once, and only in passing.
The launch of Comcast's Gigabit Pro actually benefits Google, continuing the revolution it started more than five years ago. When it announced Google Fiber in February 2010, Gigabit Internet speeds were virtually unheard of (at least for consumers). Comcast's fastest offering was only around 50Mbps. Google Fiber was unveiled as an "experiment," one intended to encourage and jump-start a shift to significantly faster broadband across the country. "We'll test new ways to build fiber networks, and to help inform and support deployments elsewhere, we'll share key lessons learned with the world," Google wrote.
Google's Internet services -- search, YouTube, Gmail, Maps, Drive, and others -- serve as the core of its business, and fuel its performance. Many of these services require speedy connections to function. Better quality broadband, no matter who supplies it, is a positive development for the company, allowing users to take better advantage of its current offerings, and making next-generation products possible.
The article Comcast Just Launched Its Google Fiber Killer 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.
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