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Inside the bold plan to bring gigabit fiber to Detroit

Colin Neagle | June 30, 2015
When discussing the ongoing revitalization efforts in Detroit, it's hard to miss the name Dan Gilbert. The founder of Quicken Loans, owner of the Cleveland Cavaliers, and a Detroit native himself, Gilbert's investment firms have funded dozens of tech startups in the city and turned its defunct old buildings into shiny new workspaces that look like Silicon Valley transplants.

"There's a whole host of things that people are disenfranchised about [with] the current providers that, even if they offer exactly the same product at exactly the same price point, we still feel that they will still choose us because there are still intrinsic values other than just the dollar value that you get," Foster says.

In a sense, Rocket Fiber can achieve its goal even if incumbent ISPs force it out of the market. Some speculate that Google does not intend to become a long-term broadband provider, but rather created Fiber to disrupt a broadband market that wouldn't have changed on its own. If ISPs roll out affordable gigabit broadband to compete with Google Fiber, more internet users get access to it. Whether or not Google provides the service, internet users will be able to consume more of Google's online services.

The same can be said about Rock Ventures. The company has invested a lot of money in downtown Detroit's commercial real estate and needs to fill it with businesses. With affordable gigabit internet service, Rocket Fiber gave it a new selling point to attract prospective tenants. And even if another ISP introduces a competitive service that makes Rocket Fiber irrelevant, businesses in Detroit will still have access to cheaper broadband all the same.

Foster says neither Rocket Fiber nor Rock Ventures has looked at the situation this way. He knows full well that a big ISP could introduce a competitive service at any moment. But he's optimistic. Foster sees the sudden competition in broadband throughout the country not as a temporary setback for incumbent ISPs, but as a sign that internet users are eager to see the market change.

"The reality is that these new startups coming like Google being the big example, or if you look at Chattanooga, EPB, they've been able to take a relatively good market share against the incumbents even though AT&T is announcing now that they're going to provide a similar product," Foster says. "So it'll be interesting to see how that continues to go, but it looks like, from our research, a lot of the incumbents are struggling with the desire, the pent-up demand for a new provider, new competition, and a new alternative."

 

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