While laying down fiber-optic cable is not cheap, Google Fiber (NASDAQ: GOOG) chief Milo Medin says the "single biggest impediment" to wider deployment of his company's popular broadband service is TV program licensing costs.
"It is the single biggest piece of our cost structure," Medin said, speaking at the COMPTEL fall conference in Dallas Monday, a telecom industry event covered by the Washington Post.
Medin's remarks came on the same day that the National Basketball Association announced somewhat controversial rights deals with ESPN and Turner, which will essentially triple the price those networks pay to show pro basketball games on TV and on multiscreen platforms.
It's just one example of spiraling program costs faced by companyies like Google, which are compelled to bundle video services with broadband in order to get them sold to U.S. consumers.
For its part, Google lacks a vertically integrated programming component--e.g., a TV production division like NBCUniversal--that might otherwise drive its programming costs down, Medin added.
"We operate at a very significant difference than incumbents we compete against," he said. "We may be paying in some markets double what incumbents are paying for the same programming."
For more:
- read this Washington Post story
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