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iansltx

join:2007-02-19
Austin, TX
kudos:2
reply to FFH5

Re: Wonder how much all of this costs

Okay...so what's the problem with subsidizing superfast access with ads that are delivered over that access? If there's some issue with this, is there a problem with Comcast-NBCU?

d1gw33d

join:2009-06-20
Clovis, CA
reply to FFH5
You're assuming too much and your snarky remark of it being "PR BS to get their as the good guy" is needless. The incumbent ISP's have price gouged customers with consistent rate hikes, implemented data caps, practice anti competitive business and provide awful customer support. Not to mention the fact they twist any regulation into a shell of its beginings and use them to squash any start ups.

Odd stance from you considering your blatant political leanings that you feel the need to slap on the left and bottom of all your posts.


FLATLINE

join:2007-02-27
Buffalo, NY
reply to Cobra11M
Oh please stop with this obligation to the stockholders nonsense. If you believe that then your a fool like the rest of them. Real business people will tell you their obligation is to the customer. Only then are you really looking out for the stockholders. Put the customer first, run a decent business, and the stockholders will profit. Putting the stockholders first inevitably alienates the customer. Want examples? Just look around. Who's missing? Who's been in trouble for years. Its just a lousy policy that will only take you so far and as we have seen can ruin some of the biggest and best.

ISurfTooMuch

join:2007-04-23
Tuscaloosa, AL
reply to FFH5
said by FFH5:

said by sonicmerlin:

Hopefully if this experiment proves successful they'll expand to other non-FIOS markets.

Never happen. Google won't make money on this. It is pure PR BS to get their name out there as the good guy. It is an advertising campaign and nothing more.

I wouldn't be so quick to jump to that conclusion. Yes, this is a good PR/press move, but it's more than that. Google makes money off visitors. Now, they don't need their own network for that, assuming the incumbent ISP's deliver those visitors, but you have companies like AT&T saying they want to be paid for carrying Google's traffic. Google doesn't want to pay them and set such a precedent, so a nice way around that is to build their own network.

Now consider the moneymaking part of this. Why do you assume Google can't make money here? The incumbents are doing quite nicely, and many of them are hampered by the limitations of old technology infrastructure. Google is free to build all-fiber networks that can do laps around the incumbents in terms of speed. If they price competitively, they'll get customers, not only because of price but also because of their immediate brand recognition and also because many people don't like their current provider too much. And, even if they only break even, they're still making money on getting the site visitors they need. And, if they decide to bail on fiber later on, they can get a lot of money by selling those networks and subscribers to someone else. They could even include a stipulation that the buyer not try to charge them to deliver visitors to their sites.

Finally, they can always use fiber as a club to hold over the heads of the incumbents. "If you won't play nice with us, we'll drop fiber networks into your territory and steal your customers."


Maxo
Your tax dollars at work.
Premium,VIP
join:2002-11-04
Tallahassee, FL
reply to Crookshanks
said by Crookshanks:

Getting back to the original point, I'm not sure what Google's long term goal is here. At their core they are a content and advertising company; I doubt they are willing to get into the last mile business on a nationwide scale.

Competition. I think they want to turn up the heat to get ISPs providing better Internet at a more affordable rate so that they can provide more compelling content.
It is the same reason they built their own browser. For the longest time they backed Firefox, but after it became clear to them that the Firefox codebase was in too bad a shape to provide the sort of fast-moving innovation they wanted to see in browsers, they started their own. The result has been very successful as Firefox and IE have struggled to keep pace with Chrome, but at the same time are almost definitely faster and more standards compliant than they would otherwise be.
Google doesn't want to be in the ISP or browser business, but since their product rides on top of both, they have a huge interest in making sure these two technologies are pushing forward as fast as possible.
--
"Padre, nobody said war was fun now bowl!" - Sherman T Potter

»maxolasersquad.com/

»maxolasersquad.blogspot.com

»www.facebook.com/maxolasersquad


Eddy120876

join:2009-02-16
Bronx, NY
reply to mrjoshuaw
Say Hello to fast data mining and info sale at the speed of light...LOL


The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2
Reviews:
·Windstream
reply to iansltx
Of course not, because like a previous poster said, pro big business for some odd reason only side with the companies who only want to maximize profit, other than putting the customer first.

Google is maximizing profit through their advertising business, and this *may* just be a PR scuttle, but in the end customers are being served FIRST. I don't know why people have it in their heads that profit always comes first, when in reality the customer is who comes first. There is NO profit if there is NO customer. I know this for a fact, I've seen it firsthand. I come from a large family, and many members started their own businesses. One business ran for over 30 years, then he decided to retire. He was making a decent living, put the customer first, and everything went well after that. Another has had his business for over 15 years, doesn't try to charge an arm and a leg for services, and he has almost too much work coming in his shop.

So this bs about "stockholders coming first" is exactly that, bs. Stockholders should realize that long term profits are the cream of the crop, not short term. I would rather invest in a company that I know I would receive returns from in the next 20-30 years or more. Short term profits are great, but they aren't required.
--
"We will evaluate these integrals rigorously if we can, and non-rigorously if we must".
---Victor Moll, invited talk, Tom Osler Fest (April 17, 2010)


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK

1 recommendation

reply to d1gw33d
He advocates for the 1% all the time. Been doing it for years.

He's always talking about freedom for Competition and etc but always is against actual competition or fairness. Not sure why.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini


NWOhio2

@buckeyecom.net
reply to sonicmerlin
Did you not realize their shareholders are going to DEMAND their money back off this build. If they don't make their $$$ they will sell this system and someone at Google will be out on the street and QUICK.


ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA
reply to FFH5
a very very very expensive "advertising campaign"


ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA
reply to xenophon
Yep, industry shills usually are.


ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA
reply to KrK
he is a hypocrite


ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA
Reviews:
·RCN CABLE
·Comcast
reply to ISurfTooMuch
said by ISurfTooMuch:

Finally, they can always use fiber as a club to hold over the heads of the incumbents. "If you won't play nice with us, we'll drop fiber networks into your territory and steal your customers."

I hope they use those exact words.


spewak
R.I.P Dadkins
Premium
join:2001-08-07
Elk Grove, CA
kudos:1
Reviews:
·SureWest Internet
reply to d1gw33d
said by d1gw33d:

You're assuming too much and your snarky remark of it being "PR BS to get their as the good guy" is needless. The incumbent ISP's have price gouged customers with consistent rate hikes, implemented data caps, practice anti competitive business and provide awful customer support. Not to mention the fact they twist any regulation into a shell of its beginings and use them to squash any start ups.

Odd stance from you considering your blatant political leanings that you feel the need to slap on the left and bottom of all your posts.

My sentiments exactly, and yet he is bemoaning the fact that Google is gettin' 'er dun!
--

Romney equals Epic Fail!


Snakeoil
Ignore Button. The coward's feature.
Premium
join:2000-08-05
Mentor, OH
kudos:1
reply to mrjoshuaw
You don't think your current ISP isn't already doing that?


Snakeoil
Ignore Button. The coward's feature.
Premium
join:2000-08-05
Mentor, OH
kudos:1
reply to Eddy120876
ISPs are already doing it, so what else is new?


DataRiker
Premium
join:2002-05-19
00000
reply to NWOhio2
said by NWOhio2 :

Did you not realize their shareholders are going to DEMAND their money back off this build. If they don't make their $$$ they will sell this system and someone at Google will be out on the street and QUICK.



I live in Kansas city and judging from the amount of people who can't wait to pre order this service I would say you have about a 0% chance of being correct.

South Korea ISP's charge about 35 ~ 40 USD for 100/100 fiber in major metro areas, so google will do just fine.

They are using basically the same business model. Cheap prices and no customer service.

That's how its done overseas and people figure it out just fine.

jjeffeory

join:2002-12-04
USA
reply to elray
The service is free. It's just that the install is NOT free. Come on, we both are fluent in market speak...


atuarre
Here come the drums
Premium
join:2004-02-14
Conroe, TX

1 recommendation

reply to fifty nine
Nothing is free. I do not care if Google "claims" it is free. As others have pointed out, this is a PR stunt, just like the wireless spectrum nonsense, and Google selling its own device, which still was under carrier control.

And companies do have an obligation to their shareholders. You don't have to believe that, but it is true.

Google will milk this for the free PR, and then the real costs will end up hitting the end users, just you watch.

openbox9
Premium
join:2004-01-26
Germany
kudos:2

1 recommendation

reply to dib22
said by dib22:

Awww... well if CableTelcoUSA returns to a fair pricing model then google will stop with KC, if not...

...Google will still stop with KC.

AKA06

join:2011-02-10
reply to FFH5
said by FFH5:

said by sonicmerlin:

Hopefully if this experiment proves successful they'll expand to other non-FIOS markets.

Never happen. Google won't make money on this. It is pure PR BS to get their name out there as the good guy. It is an advertising campaign and nothing more.

So? If anything this should prove that the incumbents are simply resting on their laurels and that the model can be done better. And, if early reaction and interest is any indication, do so quite embarassingly.

sparc

join:2006-05-06
reply to atuarre
said by atuarre:

Google will milk this for the free PR, and then the real costs will end up hitting the end users, just you watch.

so what. Let's say they charge $20 a month for their currently free tier after 7 years. Should users really end up being pissed?

The reality is that these users can go to the other two incumbent providers if they're ever unhappy with the service. The risk is all on Google and with Google shareholders for the buildout. KC broadband users win no matter how this plays out.


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
The result will be the competition will have to price with Google in mind.

In fact judging by past experience they will upgrade and sell dirt cheap in an attempt to keep Google's profits razor thin or even lose money, so that they can "convince" Google it's not profitable long term and to give it up.... should this happen however, then prices will skyrocket quickly.

A Duopoly does not competition make.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini


coldmoon
Premium
join:2002-02-04
Broadway, NC
Reviews:
·Windstream
said by KrK:

The result will be the competition will have to price with Google in mind.

In fact judging by past experience they will upgrade and sell dirt cheap in an attempt to keep Google's profits razor thin or even lose money, so that they can "convince" Google it's not profitable long term and to give it up.... should this happen however, then prices will skyrocket quickly.

A Duopoly does not competition make.

I think Google has the edge in a price war and has deep enough pockets to outlast the incumbents which is probably at the core of their hysterical fear and hatred of Google...
--
Returnil - 21st Century body armor for your PC


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
The problem, as usual these days, is Wall Street. Google has been a darling of WallStreet and has gone up and up.

However the day could come where they fail to meet unrealistic expectations... "What, profits are only up 6% when we expected 18%"!!! and then the stock could tank, wiping out billions in Google's net value.

In such a scenario, the Google CEO and Board would be under intense pressure to "Return to Glory Gains" and any "Projects" that aren't making ridiculous returns at the time could be on the chopping block.

That's my concern for this project and the reason the other incumbents will want dump in this market and keep profits low for all of them in the KC market for who knows how long. They are hoping Google will dump the project at the behest of WallStreet. It's a real threat.
--
"Fascism should more properly be called corporatism because it is the merger of state and corporate power." -- Benito Mussolini


Guspaz
Guspaz
Premium,MVM
join:2001-11-05
Montreal, QC
kudos:23
reply to KrK
said by KrK:

The result will be the competition will have to price with Google in mind.

In fact judging by past experience they will upgrade and sell dirt cheap in an attempt to keep Google's profits razor thin or even lose money, so that they can "convince" Google it's not profitable long term and to give it up.... should this happen however, then prices will skyrocket quickly.

A Duopoly does not competition make.

I suspect that one of the multiple reasons for Google's free option is that it's difficult to undercut free. What might hurt Google is that they have no tier between $0 for 5 meg and $70 for 1000 meg. There's room for something like $30 for 50 meg, for example...
--
Developer: Tomato/MLPPP, Linux/MLPPP, etc »fixppp.org


KrK
Heavy Artillery For The Little Guy
Premium
join:2000-01-17
Tulsa, OK
Yeah, I suspect they are trying to actually make a point. What it is I'm not exactly sure.

tanzam75

join:2012-07-19
reply to ISurfTooMuch
said by ISurfTooMuch:

Now consider the moneymaking part of this. Why do you assume Google can't make money here? The incumbents are doing quite nicely, and many of them are hampered by the limitations of old technology infrastructure.

But Google is changing the economics of the market by overbuilding. The incumbent may have been doing well in a duopoly -- but when you split customers 3 ways, then there's less cash to any one entity.

There's also the likely competitive response. Because infrastructure is a fixed cost, the incumbent will be willing to respond with lower prices and eating into margins. This is good for the consumer because it reduces prices. However, it presents the new entrant with a tough competitive situation. As soon as Verizon installed fiber in a neighborhood, the cable companies would offer targeted discounts that reduced the FiOS take rate.

This is why cable overbuilders have historically had such a hard time of it. RCN, for example, went bankrupt. Even Verizon, which is a much richer company, stopped the FiOS buildout due to disappointing returns-on-investment.

Of course, Google is in a different situation, because telecoms is not their primary business. Their primary motivation is likely the ancillary benefits, rather than the profit on the network itself.

tdar

join:2004-04-05
Satellite Beach, FL
kudos:1
reply to KrK
said by KrK:

Yeah, I suspect they are trying to actually make a point. What it is I'm not exactly sure.

Watch the first 15 mins of the video they tell you what the point is.
Google makes money off people using the internet. They make money off new innovations on the net as they lead to more use. Innovation as they see it is being blocked because the access part of the net has not kept up with the storage and compute part.

Google wants to change this. They will make money at it and then be in the position to call all the incumbents liars when they say they cant do it. Notice they stated over and over there are no caps on Google Fiber. Think Google wants there to be caps anywhere?

Here's a thought to ponder. What if You Tube could replace your cable or sat provider?

tanzam75

join:2012-07-19
reply to Crookshanks
said by Crookshanks:

Sorry, that's not how business works. Your example is only valid if there was no other product Google could have invested their time and money into. Google has a fiduciary duty to its shareholders to invest its time and money into projects that net the highest possible profit margin.

This is indeed how business works -- in economics textbooks. In practice, though, companies practical vertical integration even when it doesn't make sense. I suspect they do it for the same reason that they pursue value-destroying mergers -- it allows executives to build empires and bolster their clout at the company.

The classic example is the integrated oil company. Almost all the profit is in the crude oil extraction. Yet most of the majors still operate refiners and gas stations, which are essentially breakeven businesses. Only a few have been willing to divest, even though it would improve their capital efficiency.

Right now, Kansas City is a hobby for Google. But if Google were to decide to vertically integrate, though, it would not be the first time that a company made a decision based on non-economic considerations.

Also, tech investors seem to be a lot more tolerant of hobbies than utility investors. Microsoft lost money on Xbox for ten years before finally breaking into the black. If an electric utility were to go out and frack some natural gas, their shareholders would revolt.