Will Google Fiber Impact your Small Community Bank?

A well-known disrupter out of Mountain View, California has been hard at work trying to shake up the world of Internet access. Let me state right off the bat that I am no spokesman for Google or their Google Fiber service. You could argue that the service is merely a self-serving ploy by the search giant to give more people access to Google’s own vast Internet properties. In fact, industry watchers have widely speculated that this was the unspoken intent in creating Google Fiber in the first place. Despite their intent, it would be difficult to deny that Google or Alphabet (Google’s newly formed holding company) has gotten serious about improving the state of Internet access in this country. You may be asking yourself what one company could possibly do to move an entire industry. It’s all about the speed. Google is laying the groundwork (literally) for affordable gigabit Internet access, a speed which is 100 times faster than your average US internet connection. This is not a cheap endeavor, so starting back in 2011 Google began a slow rollout to a pair of test cities. In the past 5 years their scope has expanded to include 22 cities either installed or announced, ranging from California to Florida.

While this expansion has been impressive, the real payoff is neither the physical infrastructure that Google has built up, nor is it in the brand goodwill accumulated from offering affordable or free Internet access to those in need. The biggest impact of Google’s offering is the ripple effect of Google Fiber on the incumbent providers in these communities. These cities already have what most would consider decent options for Internet connectivity; albeit, many times a single provider has a near monopoly in the market. These existing providers are the complacent monstrosities that you are likely getting your Internet access from today – Comcast, Charter, Time Warner, and AT&T. Google is a brand new player in these markets, and their very presence is shaking things up.

Traditional ISP’s have made significant investments building up their infrastructure, and have become firmly entrenched. It comes as no surprise that they have fought this new competitor every step of the way by incorporating such tactics as misleading advertising campaigns, lawsuits, and lobbying for favorable legislation. In the end, these providers have been forced to adapt or lose their customers. They have been given little choice but to innovate and offer an entirely new levels of service at more competitive prices. One could argue these more modern, more affordable services would not be available today but for this interruption in the market.

Now, I am not claiming that traditional providers would never have innovated without an outsider agitating change. Google’s presence has, however, greatly accelerated the pace of change. While it would take Google decades to bury the fiber, wade through the city ordinances, and strike the necessary agreements to provide gigabit access to the all of the communities that require access, existing industry giants already have much of the infrastructure in place. At the very least, they have the appropriate resources and political connections to rapidly install this infrastructure.

While ISP’s are not classified as public utilities, they certainly model one. These mega corporations tout their infrastructure and imply that they are the only game in town. As that façade has begun to crumble, they have been increasing speeds of existing customers without increasing the price, seemingly in an effort to appease their existing customer base and stop them from looking around at new providers. This suggests that the pieces to increase capacity were already in place, but the resources were only tapped upon the introduction of disruptive competition.

I’ve told this tale not to sing the praises of Google or cut down major Internet providers, but to demonstrate just one of the influences on the telecom and broadband industry as a whole. While it is easy to think of your Internet provider as a slow-moving behemoth, they are still a technology company…and a lot can change in 3 years.

So how does this all apply to you and your business? Industry undercurrents are constantly changing the circuit options available to your institution. It is all too easy to research and enter an agreement with a service provider, then put that binder on a shelf. In many cases, though, a little bit of investigation past the status quo can improve your performance speeds, lower your cost, or possibly both. To this end, I urge you to learn about your available options every 18 months if you are on a 3 year agreement.

When doing your research, it is important to make sure you are asking the right questions. For example, Comcast may offer a cheaper per-month price on their gigabit service than AT&T, but do they have a data cap and what is the cost once you exceed it? What does your termination notice window look like and what are the auto-renew terms if you miss that window?

Communications have become an important interdependency in modern banking, so it is imperative to develop a strategy to build and manage your financial institution’s WAN infrastructure. If you find that you would benefit from some assistance in sorting through these challenges, then it may be time to bring in an impartial expert. Safe Systems can help you address your current needs at a competitive price, while keeping an eye out for where your future needs may intersect with the ever-evolving telecommunications industry.

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