Google is definitely stepping on Time Warner Cable's toes in the Kansas City area. While the cable operator continues to offer the same Internet and TV services, Google is pushing a new, exciting, and highly publicized gigabit fiber offering. How can Time Warner Cable compete?
As The Verge reports, Time Warner Cable CFO Irene Esteves addressed that question at the Morgan Stanley Technology Conference today. Her take, oddly enough, is that there isn't enough consumer demand for gigabit services—not yet.
Time Warner Cable already has things covered on the business side of things, with 1Gbps and 10Gbps services aimed at corporate customers, but its home services currently top out at 50Mbps with a 5Mbps upstream limit. Esteves claims home users typically don't go for those higher speed tiers, however. Only a "very small fraction" of them buck the trend. She seems to suggest that's because existing consumer applications don't need the extra bandwidth.
I can kind of see where she's coming from. I upgraded my cable service from 50/3Mbps to 100/5Mbps last month, and the difference was negligible across most of the web. Only large downloads from services like Steam and iTunes—and, of course, online backups—were palpably quicker.
That said, it's not like Google is charging an arm and a leg for its gigabit offering. $120 a month gets you 1Gbps up and down, no data caps, free TV and storage boxes, and a full roster of TV channels. By comparison, Time Warner Cable demands $104.99 a month for its 20/2Mbps and TV combo service. Paying $15 for so much extra headroom isn't unreasonable. Sure, the Google solution's higher downstream won't make the web much quicker, but the higher upstream can blur the line between local and remote storage, and that's a big deal. I also expect it will take more widespread (and cheaper) ultra-high-speed connections before we see new services that put the extra bandwidth to good use.
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