Back when Google Fiber first launched, Time Warner Cable, the incumbent ISP in the area, went into panic mode. The ISP even began offering cash rewards to anybody who had information on Google Fiber's activities. It was all a little seedy, and made it look like TWC was more concerned with crushing Google Fiber in any other way besides directly competing.
Well, it seems that TWC has finally realized that the only way to beat them is to compete with them, and is now reportedly offering faster speeds at lower prices to its subscribers in and near Kansas City. The Consumerist is reporting that one such subscriber recently received news from TWC that his monthly bill was being cut while getting a 50 percent speed increase. Here's a portion of the letter:
I’m a Time Warner cable internet subscriber in the KC area, and I got two(!) good pieces of news from them recently.
No. 1. A few weeks ago, they emailed me to tell me that my “Basic Rate” internet service was being upgraded by 50% from 10Mbps to 15Mbps, effective at the next restart of my cable modem. I haven’t tested this — that only occurred to me in retrospect — but it sounds great.
No. 2. My latest cable bill was ~30% lower than the previous month. $29.99 vs. $44.94, for a savings — by their calculation — “of $23.96 this month.” My calculation is slightly different, I get a savings of $14.95, but lower is better. The line item has the note: “Enjoy your savings of $23.96 by subscribing to this package. (Offer expires 11/29/2014)” It doesn’t say anything about me having to do anything to get this rate, and the “package” they mention is the one I assumed I was using already. But the bill says $29.99, so that’s what I’m putting on the check.
Of course, it should be noted that this particular subscriber doesn't live in one of the fiberhoods getting Google Fiber as he lives across the state line. He states, however, that he can see one of the fiberhoods in Kansas City from his kitchen window. His close proximity to Google Fiber may have spurred the change. As for other theories, he says that he has also recently received an advertisement for wireless 4G home service that would only cost $34.99 a month.
Regardless of which scenario is correct, it illustrates the point that I've been making all along. Introduce competition into an area with an incumbent ISP and you'll start to see them bending over backwards to retain subscribers.
We'll start to see more stories like this pop up as faster and cheaper Internet begins to spread across the nation. The FCC has already challenged states to have at least one gigabit network each by 2015, and private companies are beginning to build out fiber networks in mid-to-large size cities like Seattle. It won't be long before we start to see ISPs either competing for the first time in their existence or being left behind because they refused to innovate and compete with new technologies.