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Google Can Ditch Kansas City After Two Years
And Other Bits Inside Their Sweetheart Franchise Deal
by Karl Bode 02:30PM Thursday Aug 16 2012 Tipped by bbeesley See Profile
Light Reading Cable has managed to get a hold of the franchise agreement that Google signed with Kansas City, and it's certainly quite a bit looser than most franchise agreements have traditionally been. According to the report, the agreement allows Google to walk away from the deployment after just two years if things aren't going as planned, with the option then created for a third party to come in and run the operations. The agreement is certainly also quite generous when it comes to allowing Google to cherry pick locations, which they've buried under their "six week rally," which urges communities to root to get wired first.

Click for full size
Notes Light Reading:
quote:
While that's a clever way to stir up excitement about the project while adding in deployment efficiencies, it's not a model that franchise deals have historically allowed; they usually require the operator to make service available to all areas within a franchise region, and to get it done within a certain timeframe. The idea is to keep an operator from concentrating on affluent areas first while ignoring poorer neighborhoods -- a cherry-picking no-no called "redlining."
Of course what "franchise deals have historically allowed" is less relevant these days, since when AT&T and Verizon got into the TV business, their lobbyists convinced most states to utterly gut any franchise laws that had these requirements. While Google isn't technically redlining, we have seen how more affluent communities have been able to hire their own door-to-door pitchmen, while lower income communities have struggled to keep pace -- effectively having the similar result, just with a lot more cheering and free publicity.

Google's sweetheart franchise deal came because cities were so unimpressed with current broadband offerings, they were falling over each other to make the best possible pitch to get Google's attention. In addition to oodles of free PR, it also netted Google quite the comfortable agreement they may or may not be able to replicate if they focus on other cities.

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FFH
Premium
join:2002-03-03
Tavistock NJ
kudos:5

2 recommendations

WOW! Just another Google Beta pgm - no support; walk away

Is anyone surprised that Google, the beta queen, has allowed themselves to walk away and treat this as just another of their no support beta programs?
--
»www.mittromney.com/s/repeal-and-···bamacare
»www.mittromney.com/issues/health-care
xenophon

join:2007-09-17

1 recommendation

Re: WOW! Just another Google Beta pgm - no support; walk away

It's always been known this is an R&D experiment. Did anyone really naively think Google is fully committed to being an ISP? If Google decides not to be in the ISP biz, they'll probably just sell the KC network off to Surewest in KC, who already is an FTTH ISP in other areas of KC metro.

Edit: PS, I'm more than willing to beta test. Can easily go back to TWC or ATT. Surewest and Charter are also in KC metro.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
·Comcast

1 recommendation

Re: WOW! Just another Google Beta pgm - no support; walk away

said by xenophon:

Edit: PS, I'm more than willing to beta test. Can easily go back to TWC or ATT. Surewest and Charter are also in KC metro.

How generous of you!
I doubt you'll ever need to go back, the hard part is done, the only question would be how much the "third party" will charge you if google bails out, which depends on 2 things, a the real cost of service plus profit, plus the cost of the freebies google gave like the "Free" tier and library,school and city service discounts, etc. (like all the people who get on "FREE" tier which is price locked for 7 years, the rest of you pay for that) The other part is what part of the capital cost google would attempt to recover by selling it to the third party, it would be a nice network to own DEPENDING on the exact price and conditions the owner is obligated to and if they can reasonable recover the costs through normal rates.
xenophon

join:2007-09-17

Re: WOW! Just another Google Beta pgm - no support; walk away

It doesn't really matter to me personally if it flops. Can simply go back to TWC or ATT.

Most R&D is about taking risks with the possibility it may fail, and some aspects of it probably will and some things will be learned. Google needs to keep setting expectations that this is an experiment.

ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA

Re: WOW! Just another Google Beta pgm - no support; walk away

some people like to live in la-la land and think that anything that goes to market will be a success. I love it when companies take risks like this.
elefante72

join:2010-12-03
East Amherst, NY
Interestingly nobody talks about the innovation of the "fiberhood". If a company is going to sink capital into a specific geography, it makes sense that the customer base is there to support a profit.

This gets around redlining, because the fibre nodes are there, it just boils down to do the people want the service.

This is a huge experiment, because GOOG is giving away internet for free, one just needs to pay for the equipment.

Part of this may be finding out more effective ways to get the word out, moving to a payment plan, etc to get higher uptake.

The point I am making is that old-skool franchises don't work because it's obvious if there is an area that doesn't want to pay, then why build. Above this, there is no reason if say an area wants 10% vs the fiberhood threshold that they can't devise some wireless way to cover the area, and then if enough people join, wire it.

I think it's brilliant. This is real disruption.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
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Re: WOW! Just another Google Beta pgm - no support; walk away

Another thing to consider
take a look at the map of Google fi in Mt view. (go ahead, google it)
notice the areas not covered (some mobile home parks, most areas with underground wiring (light poles are privately owned)
shopping centers, storage facilities, a few Apt. complexs. all places that won't sign away ROW (to avoid problems when the land use changes))
Google certain had the money to put up some high power directional AP's to cover the trailer parks throughly and probably most of the apt complexs, but instead choose a "you don't want use? you get nothing !" and carefully blocked of access to those properties.

Failure to generate a positive response could lead to longterm disadvantage to all those in a neighborhood, a fiber(less) slum.
while it appears googleFiber is intended to encourge EVERYONE to get a full connection and see where that leads, it could (maybe not in KC but if more buildouts happen) lead to have and have not areas.
25139889

join:2011-10-25
Toledo, OH
local providers already do this. And the USDOE has ordered the state DOEs to create DASes to put in internet and other resources into schools. It saves $$$$ and brings in an outside non-profit to manage the IT department from ground up.

here is one of them that was created: www.noeca.org

Rangersfan

@sbcglobal.net
said by xenophon:

Edit: PS, I'm more than willing to beta test. Can easily go back to TWC or ATT. Surewest and Charter are also in KC metro.

Most customers don't want to be guinea pigs or beta testers once they are paying for a service. They may be ok with that when they are receiving the service free but not when they are being charged for it.
25139889

join:2011-10-25
Toledo, OH

Re: WOW! Just another Google Beta pgm - no support; walk away

especially when they're paying out the ass for install.
zoomer

join:2007-09-06
Rochester, NY

Re: WOW! Just another Google Beta pgm - no support; walk away

Hardly; it's only $300. That's obviously below cost unless everyone signs up, and it's a rather dense neighbourhood with short driveways.
Kearnstd
Space Elf
Premium
join:2002-01-22
Mullica Hill, NJ
kudos:1
at least Google even had the balls to push the limits rather than just sitting there never advancing anything. Sure its a beta, but even Verizon has not kept pushing FiOS because its investors have no balls.
--
[65 Arcanist]Filan(High Elf) Zone: Broadband Reports
rradina

join:2000-08-08
Chesterfield, MO

Re: WOW! Just another Google Beta pgm - no support; walk away

Along those lines, Google may have done this specifically to have a bit of "history" when they do battle with ISPs that want to above-and-beyond-what-both-ends-pay, charge them for the use of their pipes. They can point to their experience with running FTTH and hopefully be the voice of reason when it comes to government lobbying.

I still recall Ed Whitacre's rant about the Googles of the world using his pipes and wanting a bigger piece of that action or else. It seems so similar to the organized crime payments mom and pop small businesses would make to the local Carlos, Joey, Vito or Tony that "protected" them from accidental fires.

tshirt
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join:2004-07-11
Snohomish, WA
kudos:5
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said by Kearnstd:

...but even Verizon has not kept pushing FiOS because its investors have no balls.

It's pretty easy to be critical, when it's not YOUR balls on the chopping block isn't it , Even money is harder to risk when it's yours

ArrayList
netbus developer
Premium
join:2005-03-19
Brighton, MA

Re: WOW! Just another Google Beta pgm - no support; walk away

that's business.

What Google is doing is respectable. Seriously, props to them for being brave like this. Not like the money involved here will break them.

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
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Re: WOW! Just another Google Beta pgm - no support; walk away

And that's it.
Google itself was an experiment, and has run hundreds of these employee inspired alpha , beta and dozens of outside tests, about 1 in 6 moves on, at least for a while.
They certainly can afford to invest in some internet service provider research which will no doubt net the most interesting and valuable thing on earth...Information.

whether this continues on or they dump it in a couple years the will learn something from it (and we can guess) but it's pretty early for pundits to start stamping it sucess or failure, or declaring it a model for all future providers/networks.
Kamus

join:2011-01-27
El Paso, TX
said by FFH:

Is anyone surprised that Google, the beta queen, has allowed themselves to walk away and treat this as just another of their no support beta programs?

Not really. But it sure as hell beat anything else in the market though. So, who cares?
xenophon

join:2007-09-17

1 edit

1 recommendation

Meanwhile, TWC is beefing up KC staff for a war with Google

TWC is increasing KC workforce by almost 10%...

»www.bizjournals.com/kansascity/n···-in.html

Edit: Or maybe they are building up staff to handle a flood of cancellations.
cooldude9919

join:2000-05-29
kudos:5

Re: Meanwhile, TWC is beefing up KC staff for a war with Google

said by xenophon:

TWC is increasing KC workforce by almost 10%...

»www.bizjournals.com/kansascity/n···-in.html

Edit: Or maybe they are building up staff to handle a flood of cancellations.

After they fired tons a year years ago. KC used to be its own division and had its own in town call center for support, etc. Now they are part of the ohio division, and the support is done out of columbus. Their net jobs is probably still a loss even after adding these.
25139889

join:2011-10-25
Toledo, OH

Re: Meanwhile, TWC is beefing up KC staff for a war with Google

If support is being out of Columbus then they're part of Columbus they're part of Mid-Ohio. But they've been saying before that TWC was going to get rid of their divisions and create "east and west". Would be smart of them.

and Ohio has several divisions- Mid-Ohio- Columbus, and WOH, Dayton- WOH, Cinci, and NEO/WPA.
Os

join:2011-01-26
US
Reviews:
·Comcast

OK

I'd rather see someone taking a chance than complete inaction in the marketplace.

I do have some concerns about the lax nature of the agreement, but if that's what it takes to spur competition and development, then I think it's worth it. It's certainly the lesser of the evils.
tmc8080

join:2004-04-24
Brooklyn, NY
Reviews:
·ooma
·Optimum Online
·Verizon FiOS

1 recommendation

new beginning..

Google has no established reputation from walking away from projects they spend several million dollars to deploy infrastructure, particularly FTTP lines and equipment.. Don't forget, these fiber builds do have to have a kind of central office to deal with provisioning- similar to telco.. these are not just DUMB pipes you hook directly up to a backbone at full capable speed of the equipment.

These franchises have given google the benefit of the doubt as to their commitment to FTTP service. As far as redlining goes, Google stated UPFRONT what their threshold is for wiring a comminity. If after getting decent ROI and uptake numbers, why would they walk away from it? The simple fact is, if a rich community has high signups and wants FTTP, they'll get it, if the poor communitiy doesn't sign up, they dont' get it.. simple as that, and that's not redlining, that's the cold facts of wants and want-nots.. communities should consider themselves LUCKY to have the option of signing up.. don't forget.. you don't have to have the $70 or $125 service to be a participant and push enough signups to wire a community w/ installations; the free ($300 installation) service will enable a community to be wired just the same if enough people are willing to commit to FTTP. The bad PR alone from google refusing to wire a community in which the majority of "subscribers" are at the 5mbit "FREE" service level.. would cause communities to think before jumping at any knight in shining armor offering to wire a community.

** Tell me what a telco or cableco is doing to earn your business? It can't be any better than GOOGLE, that's for damn sure..

The Limit
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Greensboro, NC
kudos:2
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Re: new beginning..

...but that's arguing with common sense and factual evidence, not hyperbole like a select few like to use here, especially the ones who are ALL for big business and zero customer satisfaction.
--
"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)

tshirt
Premium,MVM
join:2004-07-11
Snohomish, WA
kudos:5
Reviews:
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1 edit

Re: new beginning..

said by The Limit:

... especially the ones who are ALL for big business and zero customer satisfaction.

Nobody, including big business is in favor of zero customer satisfaction.
Sometimes big business places other goals first, and sometimes they are just hamfisted about massaging the customers back, but everyone relieses it is far easier to live with happy customers, who are general satisfied with service, and are much more likely to buy profitable extras.
truely unsatisfied customer cut service to the bone or leave for other, even higher priced services or do without.

on the other hand some people complain endlessly about service and feel everything is overpriced, because they have unrealistic ideas about what it should cost and what they should be entitled too.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2
Reviews:
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Re: new beginning..

Tell that to the DSL monopoly in my small town. They could care less about "happy" customers here, and I haven't just been sitting on my butt about it either. I've been active with getting in touch with the FCC and BBB (BBB is useless, but still tried). I'm not talking about the local telephone company complaining about not having enough money, I'm talking about almost the entire town complaining about slow service.

I don't feel like the service I have now is overpriced. I want my service to work as was advertised to me, I don't feel like this is unreasonable, unless I'm missing something here. I realize that infrastructure and support are big costs in the game, and I understand that there are costs and profits to be made, but those profits can be made ethically (not in the case with Verizon casting off some of its DSL markets to Fairpoint, frozen FTTH expansion which really makes no sense even if Verizon does cherrypick installations which I understand needs to be done, or AT&T's frozen expansion of UVERSE). Not a big fan of UVERSE, but that's another story.
--
"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)

tshirt
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Re: new beginning..

said by The Limit:

I don't feel like the service I have now is overpriced. I want my service to work as was advertised to me,

and that is reasonable, you deserve to get what they advertize.
I'm not sure who you complain to in your area, I would be lookt to the FCC, FTC, State attorney general, local and congressional reps, and first most get a few like mind people together and approach the VP or managers of the company (formal face to face meeting) to inform them how unhappy YOU all are and what are they willing to do to fix it, if they don't help go up the chain.
All this companies have some sort of franchise or liesence that goes through a public renewal process, and they really don't want vocal meeting attendee's or letter writers to be unhappy.

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: new beginning..

If I do end up moving back, this will more than likely be the next phase. Thanks for the advice.
25139889

join:2011-10-25
Toledo, OH
LMAO! they don't have one cause they NEVER doen it before! LMAO!

And you do realize their ROI is going to be very low right? Even FiOS numbers are well below what their project numbers were to be, and still are.

And okay- its not redlining when Google does it- but its redlinging when Verizon does it ? makes sense right?

actually- WOW- best customer service and team around!

The Limit
Premium
join:2007-09-25
Greensboro, NC
kudos:2

Re: new beginning..

Sources? Or just ranting? Sometimes I don't get what you are trying to say.
treyatl2006

join:2012-01-26
Atlanta, GA

MAYBE.....

I think Google was just looking out for their best interest. If this becomes a huge flop then they wont have to be comitted to it for a long term. I think if it becomes a huge success in Kansas City then Google will eventual build out in other areas. Or they will atleast partner with different municipalities so they can offer reasonable highspeed internet to their citizens. I know GOOGLE lobbied hard in Georgia to keep SB 313 from passing. SB 313 is a bill that basically makes it very difficult for local governments to build out their own broadband networks. Not saying those two are connected but you never know their strategy and plans. I do think that the fate of advancing broadband initiatives in the US is in the hands on Kansas Citians.

alchav

join:2002-05-17
Saint George, UT
Reviews:
·ooma

Google and The Last Mile!

I still have not seen any information on how Google will Wire The Last Mile. I guess it's like most people think, just drop it from the closes Pole, but that is very archaic and not environment friendly. Google should run their T3's or equivalent to the Fiberhood, and then let the Fiberhood wire themselves.

••••
brianiscool

join:2000-08-16
Tampa, FL
kudos:1

Google

Let's hope people that are tech savy in Kansas jump on. If this fails then Google will most likely bail out.
xenophon

join:2007-09-17

Re: Google

It's in Missouri too. What's interesting is that the most tech saavy and highest income area of the metro is Johnson County, KS, in the SW part of the metro but Google has no plans to go there, except for a tiny sliver. It is prompting techies from that county to want to move into the city core.

Not many in low income areas are signing up, the mid/higher income areas are. Many hoods are having problems signing up because Google signup DB is still having problems with multiunit buildings. My condo building in middle of city still can't signup. My fiberhood still doesn't qualify even though above avg income because most can't register as it's mostly apts/condo hirises, ditto with downtown KCMO. Thousands of lofts are having problems registering, though some work.

gjrhine

join:2001-12-12
Pawleys Island, SC

Showstopper

I hear they do not get ESPN.

••••

insomniac84

join:2002-01-03
Schererville, IN

How is this suprising?

Most people have assumed that google might only be interested in the experiment aspect.

That they will do all this work, prove their point, do any testing they want to do, and then sell off the network to the highest bidder.

If they are nice they will require the bidder to provide a minimum level of service. That way anyone on the service can still have the speed to use bandwidth heavy online services.

Barbara

@tmodns.net

This sucks, Google!

I am hurt. Google came in here like gangbusters rolling all over the local carriers and promising to deliver Kansas City from the legacy DSL and slow cable internet! They didn't bring any sustainable jobs and they have managed to keep their marketing cost down by asking us to knock on our neighbors doors and get them interested! Hell, this isn't the country, I don't know my neighbors and would get upset if some stranger in the neighborhood came knocking on my door asking if I used cable our the internet! Maybe I spent too much time in Jersey but Google rolled up in here with disrespect and full of preconceived ideas about the "folk" they'd be dealing with and now you tel me they aren't vested in the success of this venture? I'm shocked!