Google is bringing superfast internet to four cities. Cable companies should be terrified.

Google is escalating its fight with conventional broadband internet providers, announcing plans this week to expand its super-fast internet service to four new metropolitan areas in the American South. The Atlanta, Nashville, Charlotte, and Raleigh-Durham metro areas will soon join Kansas City, Austin, and Provo, Utah, in Google's high-speed internet club.

Google Fiber is trying to solve a basic problem with American broadband service: using fiber optic cables, it's possible to build internet service that is 10 to 50 times faster than the typical broadband connection today. Faster broadband is good for bandwidth-hungry services like Google's YouTube. But bringing this technology to consumers is expensive, and a lot of incumbent broadband providers have been dragging their feet.

But was Google serious about becoming a major player in the broadband business? Or have Google's early forays into the broadband business been just a ploy to shame incumbents into stepping up their game? Until now, it wasn't clear. But Google's decision to expand its network from three metro areas to seven strongly signals that the search giant is serious about the residential broadband market. And that should terrify cable companies like Comcast and Time Warner Cable.

Why Google got into the broadband business

Google, state and city officials gathered at the Provo Convention Center to announce that the city has been chosen as the third city in the country to get Google Fiber on April 17, 2013. (George Frey/Getty Images)

When Google first announced Google Fiber five years ago, there were good reasons to doubt whether it made business sense. The company was going to have to navigate state and local regulations, build a lot of physical infrastructure, and negotiate for television content. This was all expensive, complicated, and far from Google's core areas of expertise.

So why did Google do it? One likely reason: it serves as a real-life research testbed, allowing the company to experiment with high-speed networks before its competitors. But more important, it was a way to publicly shame other US broadband providers, by demonstrating just how far behind the curve they had fallen in broadband speeds.

When Google began work on its fiber project around 2010, typical broadband internet service ran at 10 to 20 megabits per second. Google Fiber is 1 gigabits per second — up to 100 times as fast. If Google could scare companies like AT&T and Comcast into upgrading their own networks, it could improve high-bandwidth Google products like YouTube and make room for new Google products in the future.

Of course, this strategy works best if Google plays coy about its long-term intentions. Incumbent broadband providers will fear Google Fiber more if they think it might expand to more places around the country. So Google has always said that it could bring fiber to more cities, but it has always been vague about where and when that might happen.

On the other hand, being vague would also have been a good strategy if Google was planning on expanding all along, because it gives the company more leverage in negotiations with local governments. Building a broadband network requires a lot of help from municipal officials on issues like permits, fees, and access to city-owned facilities. By taking proposals from dozens of cities and only accepting a few of them, Google has been able to get the best possible terms, keeping its costs low.

Existing broadband providers should be worried

Evidently, Google's early experiment in Kansas City in 2011— and then Austin and Provo more recently — have been a success, because Google is now expanding into several new cities. In addition to Atlanta, Nashville, Charlotte, and Raleigh-Durham, several other cities are being considered for future expansion:

That gives companies like AT&T, Verizon, Comcast, and Time Warner Cable a lot of reason to worry. The incumbent providers have been upgrading their networks over time — Comcast boosted standard tier speeds from 3 Mbps in 2003 to between 25 and 50 Mbps today, for example — but these upgrades have not kept pace with what's technologically feasible. With relatively little competition, there just hasn't been much reason for broadband providers to upgrade more quickly. But once Google enters the market with service 10 to 50 times faster than what's already on the market, competitors are going to feel more urgency.

And it will look awfully suspicious if the incumbents only make big upgrades in cities where Google comes to town. Regulators and customers alike will want to know why the incumbents aren't building gigabit networks in every city. And of course companies that operate in non-Google cities will worry that Google could come to their town next if they don't keep up.

So while Google Fiber is still going to be available in just a small fraction of the country, its impact will be felt nationwide. The project will simultaneously highlight just how much room for improvement there is in other companies' networks and create a credible threat that if companies in other cities don't provide faster service, Google might come in and do it instead.

Disclosure: My brother is an executive at Google.

Update: This article originally used a 2013 figure for Comcast's standard network speed (20 Mbps). I've updated the article with 2015 speeds (25 to 50 Mbps) provided to me by Comcast.

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