Cable Operators

Britt: Google Fiber an ‘Overbuilder’

TWC Chief Says Impact of Internet Giant is Small 4/25/2013 10:32 AM Eastern

Time Warner Cable chairman and CEO Glenn Britt said Google Fiber, the 1 gigabit per second fiber-optic service launched by the search giant may have some of the glow from its parent, but in the end it isn’t offering anything that the MSO hasn’t successfully competed against for decades.

“What they’re doing is not any different than an overbuilder,” Britt said on a conference call with analysts to discuss first quarter results Thursday. “And we’ve had overbuilders for the last several decades in the business.”

Google Fiber has been offering its 1 Gbps high-speed Internet service in Kansas City since September  and has said it will expand the experiment to Austin, Texas  and Provo, Utah (a Comcast market)next. The service offers speeds that are about 10 times faster than the fastest high-speed residential Internet service from cable operators and has also offered a pay TV service to customers.

Time Warner Cable chief operating officer Rob Marcus noted on the call that Google Fiber is currently in front of about 4,000 homes in Kansas City (2,000 of which are TWC customers) and so far, defections to the service are “de minimus.” He added that TWC’s subscribers in Kansas City and Austin represent about 2.5% of TWC’s total video and high-speed Internet customers.

“Despite the glow, the products are essentially the same as others are offering,” Britt said. “The speeds for the last little bit of the plant are faster, but they connect to the same old Internet where most of the servers are actually slower. Who knows what their intentions are; they have to speak for themselves. I would question the economics of this and therefore their motives, but we’ll have to see what they do.”

And Britt added that 1 Gbps service is not necessarily revolutionary. TWC can offer speeds 10 times faster to its business customers.

“There is obviously a public relations intent to depict the cable and traditional phone industries as stuck with old technology and resisting change,” Britt said. “In the business market, where there actually is demand for much higher speeds, we are pulling tons of fiber, we’re offering speeds up to 10 Gbps, not just 1 [Gbps]. We’re doing this where there is demand.”  

September