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Cable service will reportedly role out in the Kansas City area, will not deploy nationally

Google Inc. (GOOG) is already on top of the lucrative smartphone, advertising, and internet search markets.  It has diversified into other ventures including electric powermusic, and personal computer operating systems, as well.  But there are only two directions to go in the world of business -- up or down -- so the pressure is on Google to continue to diversify into new markets.

I.  Google Takes to the Television -- Again

The company's latest plot, according to a report in The Wall Street Journal, is to sell a subscription cable offering.  To develop these plans Google has snared Jeremy Stern, a respected cable executive, whose experience included a stint at U.S. West, Inc. (USW) subsidiary Continental Cablevision.

Led by Mr. Stern, Google is reportedly in talks with major cable channel providers like The Walt Disney Comp. (DIS), Time Warner Inc. (TWX), and Discovery Communications Inc. (DISCA).  All of these companies and Google declined to comment on the rumored talks.

To those unfamiliar with Google's latest efforts, television may seem a bit of a puzzling market for Google to be diving into.  But given Google's project to test a trial deployment of high speed internet and digital phone service to Kansas City, Kansas television seems a natural fit, as most veteran firms bundle the three services -- television, cable, and phone -- together.  Plus there's the small temptation of cracking what amounts to what is expected in 2011 to be a $150B USD market.

Kansas City Wide
Kansas City is getting Google phone and internet service, so why not cable? [Source: Ron Saari]

Standing in Google's way are the veteran cable and satellite firms, who are actively working to get exclusivity contracts, which would lock would-be entrants like Google out of the mix.  Keval Desai, a venture capital analyst with InterWest Partners LLC, "TV is built on a closed system, which is why traditional cable and satellite operators are the only place where consumers can get ESPN and other channels."
Google Cable graphic

But Google is one of the few who might have the financial power and reputation to potentially break into the closed market.  It's not entirely unfeasible that Google could gain access.  Historically, according to the WSJ, cable companies are willing to license channels to other companies like satellite firms and phone companies, assuming they're willing to pay much more than the standard rate.  And the fact that Google thus far claims no intentions of rolling out national service could assuage the concerns of wary companies like Time Warner, whose sister companies sell cable themselves in some markets.

III. Could Google Cable go Nationwide?

For those lucky individuals in the Montana or Missouri in the regions covered by Google, the promise of cable should excite.  Some believe Google could offer cable at better rates than local competitors, even paying a higher price per channel.  Ostensibly it would be cable of carrying out such a feat through its industry-leading advertising prowess.  States Mr. Desai, "Internet companies like Google will be able to give you that same high-quality content [possibly at lower prices]."

As for the rest of the country, one possibility is that Google could eventually try to offer a "virtual" paid cable service inside of its ultra-popular video sharing site YouTube.  However, the WSJ's source on the possible K.C. deployment says that is "not on the table right now" in terms of the current talks.  Still the source says they believe preliminary discussion on that possibility are in the works.

YouTube Movies
Cable subscriptions could be the next addition to YouTube.

Of course, that kind of approach would only work if internet companies don't block YouTube to promote their own cable TV offerings, as some have done with internet channels on Google TV.

Source: WSJ

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Yes please!
By Shig on 11/4/2011 2:54:05 PM , Rating: 2
I would honestly buy this simply to say F U to AT&T and Comcast. The American telecom industry is almost as corrupt as the fossil fuel industry.

Which country has the fastest and cheapest broadband? South Korea. In 1999 their government FORCED the telecoms to open their networks and allow competition. Now they have 50mbps+ fiber available to almost everyone, with no data caps, for around 25$ a month. The facts are there in clear black and white.

RE: Yes please!
By Mitch101 on 11/4/2011 3:16:00 PM , Rating: 5
Its Close:

RE: Yes please!
By tecknurd on 11/4/2011 10:10:16 PM , Rating: 2
You missed one important thing in your expenses is who provides your high speed Internet service. High speed Internet service in the US costs about $65 to $70 per month, so your $14 will be $80 to $85 per month.

RE: Yes please!
By weskurtz0081 on 11/6/2011 12:51:59 AM , Rating: 2
Damn man, $65-$70 a month? I never pay more than $50 for high speed internet!

RE: Yes please!
By Zirconium on 11/6/2011 9:58:04 AM , Rating: 2
Not everywhere. I've lived in several areas and have never paid more than $40/month for just internet - the least was $15 for 1.5mbps naked DSL, which wouldn't be enough for streaming, but I'm currently paying $30 for 20mbps. This is also a fixed cost for many, particularly those who read this site.

RE: Yes please!
By augiem on 11/6/2011 1:16:45 PM , Rating: 2
On comcast, you can only get $30/mo for a limited time promo deal and then you're kicked up to $60. If you're referring to some deal like that, it's a little bit slanted.

RE: Yes please!
By Samus on 11/7/2011 11:08:39 AM , Rating: 2
I've had comcast almost a year. It started at $30, then after 6 months went to $45, and after 12 months will be $60. This is the 22mbps package.

When it hits $60, I either have to switch to AT&T fuck-me-in-the-ass DSL service at 1.5mbps, the fastest I can get at my location...or drop a speed grade with comcast to 8mbps at $30/month, the likely outcome.

Either way, its all pretty expensive. Most industrialized countries has broadband competition from multiple ISP's that lease the infrastructure from the government, offering substantially faster internet at substantially lower prices. Rogers in Ontario offers 50mbps internet with no cap for $40/month. Orange offers 20mbps internet in the UK for $30/month, again, no cap, no contracts and no comcast 'price tiered' gimicks.

RE: Yes please!
By nafhan on 11/7/2011 9:19:30 AM , Rating: 2
Agree with the others... I'm paying $45 for FiOS. Previously, I was paying about $50 for DSL + home phone. So, I'm guessing you're talking about cable internet. I've seen similar costs in my area for cable internet when it's not bundled with other services.

RE: Yes please!
By AntiM on 11/4/2011 3:26:49 PM , Rating: 2
If Google could just roll out the high speed fiber, I would be happy. I'll gladly take high speed internet over TV anytime. I don't see that they would need to negotiate with Viacom or ESPN or Disney or anyone else. Don't worry about the TV, just give me the internet connection.

RE: Yes please!
By someguy123 on 11/4/2011 3:57:24 PM , Rating: 2
Agreed. I don't understand why they're going for cable television when TV networks have been struggling for years thanks to the internet. Meanwhile google's bread and butter is their internet advertising/data mining.

I would pay good money for smooth, consistent fiber access, if only it were available.

RE: Yes please!
By mcnabney on 11/7/2011 9:43:43 AM , Rating: 3
While some TV networks have been struggling, cable providers have had to lease more dump trucks to haul the flow of cash to the bank.

RE: Yes please!
By XZerg on 11/4/2011 3:28:03 PM , Rating: 3
You do realize that South Korea's area compared to US is smaller by a factor of 100 - 100,000km^2 vs 10,000,000km^2? To make matters worse, the population there is 50M vs 300M in US. Overall it would be "cheaper" to implement and upgrade technologies in South Korea than in US.

The above doesn't stop US from technically upgrading the core cities to such speeds and so for this the telecoms should be looked down upon.

Another thing is SK acknowledge and embraced technology whereas US just does not seem to know what it wants to embrace - superpower, oil, technology, ... It is trying to do all but at the same time given that most of the politicians are either funded by companies with vested interest or are part of such companies, they have their political bullcrap to maintain. And this is why it fails to push the country ahead in any of the goals.

RE: Yes please!
By Flunk on 11/4/2011 3:56:02 PM , Rating: 2
Don't you know that America is the "Best Country that God Ever Gave Man in the History of the World"? Of course everything there should be better than South Korea! Reality can't possibly stand in the way of that!

RE: Yes please!
By Shig on 11/4/2011 4:50:26 PM , Rating: 2
XZerg, I used to believe that exact same sentiment. I agree that it is easier to basically just wire up a very high density population. Yet when you look for fiber optic maps of the US, you just cannot find them. This is not an accident, the telecoms don't want you knowing where the fiber is or who uses or why.

There is more fiber optics laid in New York than in South Korea as a whole. There are more fiber optics in Silicon Valley than South Korea, there are more fiber optics in most US states that go unused than most countries even have. You may say this is conspiracy and pessimism, but I dare you to find an up to date map showing where fiber is, how it's being used, for what purpose, who laid, at what cost was it laid, how much of it was laid, etc etc etc, the list just goes on. AT&T, Comcast, Verizon, have paid to keep it this way in the name of 'competition'.

RE: Yes please!
By Spuke on 11/4/2011 5:42:56 PM , Rating: 2
Wow! What a stretch. Just because the telcoms won't tell you where their fiber is (none of your business really) doesn't mean they're up to no good.

RE: Yes please!
By borismkv on 11/4/2011 6:01:24 PM , Rating: 3
It is my business if they were given government subsidies to lay the fiber, which they were. Then there's the fact that having an actual map of fiber lines would keep Billy Bob from driving through them with his plow (happens a lot in Southern Arizona).

RE: Yes please!
By Spuke on 11/4/2011 6:16:29 PM , Rating: 2
It is my business if they were given government subsidies to lay the fiber, which they were.
"I can dig where you're coming from."

RE: Yes please!
By ount252 on 11/4/2011 9:54:46 PM , Rating: 2
FYI-A lot of the Telecom companies lease each other's backhauls. Plus, there are major Backhaul providers out there that only sell fiber trunk bandwidth. One of the largest trunk providers out there is Level 3. Here is their trunk map

Another would be Great Western Communications, but they are mostly Wireless.

Just because you aren't informed doesn't mean something simply doesn't exist. Why should an end user need to know about uplinks that are astronomically out of their price range? You advertise to a potential customer base, not to everyone willy-nilly. Advertising and marketing is expensive, and you will find that there are amazing products and huge companies out there that you know nothing about because you aren't in their target demographic.

RE: Yes please!
By Cheesew1z69 on 11/5/2011 1:37:25 PM , Rating: 3
RE: Yes please!
By sigmatau on 11/4/2011 8:04:37 PM , Rating: 5
Wow, same tired, old, horrible argument.

So why don't high densely populated have much higher speed internet for a lower price? We are literally paying 5-10x as much as the Koreans for what we are getting.

So please, for the geography major, tell us why NY City, Chicago, LA, etc. don't have this kind of internet, at this price, with no caps?

We don't have to hook everyone up at the start. We begin with the high pop areas and go from there. We don't have a free market in the US. We have conniving companies that limit competition. I'd rather the government sell me my internet.

But hey, keep supporting these slimeballs.

RE: Yes please!
By someguy123 on 11/4/2011 9:14:07 PM , Rating: 2
Did you even read his post? He addressed that.

RE: Yes please!
By Doh! on 11/5/2011 3:25:20 AM , Rating: 2
Eh, yes S.Korea has lightening fast internet service at a much lower price. I am currently living in Korea. I pay about $40 for HD cable tv and an internet service so fast that downloading a BR movie takes only few minutes. Downloading a sitcom episode literally takes few seconds.
But guess what. I miss a lot of amenities and conveniences that Chicago (my home town) or NYC (where I'd lived for 10 yrs) provides. I also miss "cheaper" or much lower cost cars, houses, mobile phone bills, gasoline, etc. You can't have'em all.

RE: Yes please!
By HoosierEngineer5 on 11/5/2011 11:57:16 AM , Rating: 2
The typical response - 'Just move', to Korea, in this instance.

Those of us with NO access to broadband are used to it.

RE: Yes please!
By Solandri on 11/6/2011 12:14:03 PM , Rating: 1
We don't have a free market in the US. We have conniving companies that limit competition. I'd rather the government sell me my internet.

Your political axe to grind is showing. Both business and government are complicit in this. It was the government that gave those companies exclusivity deals thus limiting competition. That's why in most places in the U.S. you have a "choice" of one local phone company and one cable TV company.

If the government truly wanted competition, all they had to do was refuse to grant an exclusivity deal. No need for them to start their own ISP.

Exclusivity deals sort of made sense in the 1970s, when different media and different companies used different transmission standards. You didn't want to clutter up your telephone poles with wires from a dozen phone companies and half dozen cable TV companies. But today, almost all networks are packet switched, meaning you can transmit any type of data over the same network.

If the government is going to get into anything, they should create a network utility company which simply lays down fiber network lines to each home but does not offer service. Then they should allow anyone to sell you phone, TV, and/or internet service over that fiber at a fixed price. The company that owns the fiber should never be allowed to offer service, and vice versa.

"I want people to see my movies in the best formats possible. For [Paramount] to deny people who have Blu-ray sucks!" -- Movie Director Michael Bay

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