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Under the radar: Google's lightning-fast fiber service in Kansas City might be putting pressure...

Under the radar: Google's lightning-fast fiber service in Kansas City might be putting pressure on cable operators to cut broadband pricing, according to reports. Customers in the region are seeing unexplained price breaks timed just as Google Fiber went live. Though its only one mid-size market, and Google's plans for a larger rollout are far from clear, the issue is giving cable companies something to think about.
Comments (6)
  • wigit5
    , contributor
    Comments (4119) | Send Message
     
    Wish they could undertake the whole country....
    6 Feb 2013, 02:04 PM Reply Like
  • James Sands
    , contributor
    Comments (2100) | Send Message
     
    Interesting, does anyone know where I can get a solid breakdown of who owns the content distribution infrastructure? I'm thinking AT&T, Verizon, etc., but does Comcast for instance, own infrastructure??

     

    I will research these companies soon, but I thought maybe someone had an idea out there to quickly summarize the infrastructure picture based on ownership.

     

    There is an important dynamic between content creation and ownership, platform distribution, and infrastructure (distribution) ownership. All three are necessary for consumers to get what they prefer.

     

    From an investment standpoint, there are opportunities within all three areas as well.

     

    I am currently long DISCA and SNI, and am interested in adding other content/program owning companies, but am interested in the distribution/infrastru... side as well.
    6 Feb 2013, 02:04 PM Reply Like
  • dividend_growth
    , contributor
    Comments (2895) | Send Message
     
    AT&T and Verizon make most of their money from wireless so they are not that greatly impacted.

     

    The cable companies, on the other hand, will feel the heat as they belong to most hated companies in this country and carry an enormous amount of debt.
    6 Feb 2013, 02:19 PM Reply Like
  • SivBum
    , contributor
    Comments (1819) | Send Message
     
    AT&T and Comcast will lose not just their land based phone customers but also internet service. U-verse cable will suffer as customers migrate more and more to netflix, Amazon or hulu.
    6 Feb 2013, 02:45 PM Reply Like
  • KISS_investor
    , contributor
    Comments (340) | Send Message
     
    Comcast owns ALL of its infrastructure..so does att and verizon...they are hugely impacted by developments in the local home broadband and cable market...they make more from wireless, that's true...

     

    Verizon has overbuilt about a quarter of comcast's area, their FIOS service is excellent, but the costs (around $20 billion!!!!!), the time to market(they started the buildout almost 10yrs ago!), and the fact that they are basically only able to compete on price against the entrenched cable co's forced verizion to give up building many more areas..

     

    do the math...google is doing a wonderful test, they are likely to roll it out more...if they go to comcast area, comcast will simply wait to see exactly what area is built, and they will do deals like crazy ...

     

    google's cost to build out anything but tests would be astronomical...they will never do it everywhere, however, they are establishing a proof of concept that long term speeds can be upped, and remember that cable companies simply UPGRADE plant as they go..its an incremental cost...there are no patents for higher speeds, its just engineering and capital...

     

    Comcast and others will use the higher speeds and the duopoly nature of their networks to make sure that over the top internet companies like nflx can never gain traction by tiering data speeds and data caps... if you don't buy the cable, you won't get the data except at high rates..this relegates netflix to a tack on service only over time...it will be like an hbo or showtime...

     

    as consumers, the over the top idea is very attractive but its a fantasy... it cost comcast over $80 billion to build out its networks...that's their cable capex over 20 years...to compete with them, you would need to spend the same, and you'd need to do it while comcast upgrades and prices you into unprofitability..over time they will simply charge one price for data, and you'll be able to watch cable tv packages as part of it...if you don't want any cable, the price for data will be huge...

     

    don't shoot the messenger though..buy the stock...20 years of stagnation and investment has created a 5% growing cash flow machine that has aggresively bought its own stock since it was in the teens and will likely grow its dividend consistently for many years..its one of the safest and most predictable cash flows out there
    6 Feb 2013, 03:55 PM Reply Like
  • Jbgoose
    , contributor
    Comments (1341) | Send Message
     
    It is my understanding that they are required by law to provide access to these networks to other parties. Sprint an VZ share the network in my area, Verizon own Fios in my area, not cmcsa. However as noted above, people who have Fios in many areas actually are paying cmcsa who is paying vz for the use of the infrastructure. It's a big bandwith swinging orgy. Google is capable of repeating this in any market they want... I hope they do
    7 Feb 2013, 09:48 AM Reply Like
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