Not a true representation
The net-net is: this R&D project is not representative of an ability to repeat this across the US.
• Cities will want their subsidies to continue (free broadband, TV stations, school equipment, etc)
• Cities will want space, power and construction paid for
• Government will want commitments to under-served areas
At this point it is an interesting technical project, but anyone that holds it up as a business model should be asked the tough questions.
·Time Warner Cable
·Verizon Online DSL
Here's the key though: Google is offering access 20x faster than their nearest competitor, for less off-promo than their cheapest competitor charges on-promo for one-twentieth the download speed (and one-two-hundredth the upload speed). I'm sure many cities would make concessions to keep such a quantum leap in town.
As for free access for anchor institutions, franchises tend to have that clause in there. For Google, since we're talking about a complete FTTH system, these institutions are just another premise. Not a big deal to wire, not a big cost to serve.
As for under-served areas, Google is being very transparent about why they will end up not wiring some neighborhoods out of the gate: they'll have less than 10% (or 5%) market share when they're done. Google is relying on everyone signing up all at once to keep deployment costs per premise low, so they can't afford to go into a community and wire one out of every twenty-five households, who already have cheap broadband from AT&T (via DSL) if they want it. I don't hear anyone in KC complaining about Internet prices on the low end, so that's likely why everyone's okay with Google redlining. It's just a fact of life that a brownfield FTTH overbuild is a bad way to serve customers who aren't willing to pay $50 per month for Internet access of any sort.
I think they are doing a great job letting people infer that an ISP can deliver 20x for less than the cheapest competitor. My question is can they actually make a business out of this...
|reply to iansltx |
The vast majority of consumers care more about price than speed. They won't pay *that* much more for extra speeds.
Well then, why doesn't DSL have a lot more customers?