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Not really. Your question is reasonable, but the real point here is that Comcast is not remotely competitive with Google Fiber. If Google Fiber were a loss lead
by arebop 12y ago
Not really. Your question is reasonable, but the real point here is that Comcast is not remotely competitive with Google Fiber. If Google Fiber were a loss leader or otherwise levitated by Google, then this would be a disingenuous comparison. But we know that Fiber is not operated at a loss [http://gigaom.com/2012/07/26/the-economics-of-google-fiber-and-what-it-means-for-u-s-broadband/ http://gigaom.com/2012/07/26/the-economics-of-google-fiber-a...].
So it may be the most profitable part of Google's business, or it may earn as little as $0 profit, which is roughly what you'd expect in a perfectly competitive commodity market. In any case, we can clearly see that Comcast is not serving consumers as well as possible.
- deleted 12y ago[deleted]
- rayiner 12y agoHaving a profitability above zero doesn't mean much. Nobody is going to invest billions a year in a telecom network to not make any money on it. The fact that Google can do it in a handful of markets selected for their willingness to grant massive regulatory concessions,[1] doesn't meant that they could deliver that service at that price if they had to operate at the scale Comcast does, with the regulatory constraints Comcast is subject to, and with the need to please shareholders without leaning on cloud services synergy. [1] This issue is important but underappreciated here on HN. Uptake rate is a key driver for the cost/benefit analysis of investing in telecom infrastructure. The cost of building out to a neighborhood dominates the cost term. So how many people in each neighborhood sign up has a huge impact on your per user cost. Google only builds out to fiberhoods with demonstrated interest. In most cities, Comcast is legally prevented from doing this.