Technology

Google Dumps Kansas City Broadband Subscribers

Douglas A. McIntyre

Published: April 11, 2016 6:41 am

Last Updated: January 13, 2020 10:57 am

It was too good to be true. The management of Google Fiber offered Kansas City residents free 5 megabits per second (Mbps) connections. Google will pull that offer in May, according to Engadget. In its place, Google will offer a 100 Mbps for $50. So much for bringing free internet to the United States.

One theory is that Google’s new parent, Alphabet Inc. (NASDAQ: GOOGL), will cut a slew of unprofitable programs previously offered by the company. Google Fiber is one of them — a broken experiment. Presumably, Google’s past plan was to flank paid telecom fiber products, cable and satellite. The notion was of an internet company that eschewed profits for universal service.

The decision is a lucky break for those companies that make billions of dollars from paid connections. Each had to sweat a free product with a roll-out across the country. Google had the balance sheet to support the move, with a cash hoard well into the tens of billions of dollars. Because it is not a content company, it would not compete with itself. Paid content from Google division YouTube has started to change that.

The wired and wireless broadband industry has become immensely confused. 4G has become a service that no wireless consumer can be without. This gives the big four wireless companies, Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), Sprint Corp. (NYSE: S) and T-Mobile US Inc. (NYSE: TMUS), a chess game of fees. As each competes with the other, prices seem to go lower, but the customer still pays the freight. The same situation holds true for the battle between fiber to the home and cable.

The other battleground among companies vying for broadband users is content. Brutal competition among Netflix Inc. (NASDAQ: NFLX), Amazon.com Inc. (NASDAQ: AMZN) and Apple Inc. (NASDAQ) has kept the prices of these services low. Free broadband made subscriptions to these services more affordable. The cost of the “pipes” had gone away.

Google was likely the only company that could or would offer free broadband, a part of its mission to allow every American access to the new world of communication, news and entertainment. That is gone without any explanation.