If you’re selling products or services with high capitalization or fixed costs, these circumstances often produce barriers to entry for any potential competition. Sometimes this situation creates high prices and inefficiencies that remain unaddressed for the consumer. If you’re the only seller of mousetraps, then innovation isn’t high on your list since your profitability is likely just fine. But what about the business of providing water or sewer lines to your home? No room for competition there, and that’s what economists call a natural monopoly. Electricity transmission lines are in the same category. If they’re not provided by government, they are often regulated by public policy since the public cannot count on the free market to establish the best pricing or post-purchase support.
Cable television companies and internet service providers are only slightly different, and the competition for providing these products could soon change in Salt Lake City in a very appreciable way. Mayor Becker’s office has announced the completion of its first-phase response to Google Fiber’s request for information on existing infrastructure, ways to expedite construction timelines, and potential sites for the ‘huts’ that are required to service 1 GB of transfer speed to its final connections into the state’s homes and businesses.
For the past two months, a team from Becker’s office has been compiling the requests that Google has made in order for the Mountain View, California company to get the same determination that Provo earned a year ago. This distinguished status includes internet access to those unable to afford faster optical fiber delivery, and internet and television streaming with gigabit speed. This has been made the norm in Palo Alto, California near its Stanford University campus, Kansas City, Kansas and in Austin, Texas.
Skeptics say that Google isn’t really going to offer the service to as many cities as have expressed an interest in having the information giant come to their town. Google has remained silent on speculation that it is using this process to cause existing internet service providers (ISPs) to increase their level of service so that Google searches can be faster and done from more locations.
Google Fiber representatives were collecting market information at Utah’s most recent broadband conference hosted in Provo by Governor Herbert’s Office of Economic Development. Their first question to conference attendees: “Where do you live?” Now that the initial application has been completed by Salt Lake City, and because Utah has broadband in an astounding 75% of the entire state’s households, chances are very good that ISPs and cable services operating in Utah may have some additional competition in 2015. Google plans to announce its full extension strategy in January.
More information on GoogleFiber’s Gigabit and Gigabit+ services and pricing is available here.