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Many Realizing Google Fiber Will Never See Massive Deployment
Google Won't Have the Stomach for the Fight, or the Bill

As we've noted more than a few times, the goal of Google Fiber is to generate press, gather real-world data on networks and video ad delivery, and light a fire under the pampered behinds of incumbent broadband operators, with the fleeting hope that tomorrow's networks will come just a fraction more quickly to an uncompetitive market. The goal was never to take the project nationally, though the company certainly benefits from people thinking that's a possibility.

While Google Fiber's announced expansion to Austin (or more specifically some scattered parts of Austin, eventually) has driven a new round of press hype, closer examination of the numbers reveals the daunting cost of even a minor Google Fiber deployment. Two analysts at Bernstein Research this week estimated that Google has spent around $87 million so far on the deployment, and that it could cost $11 billion to deploy 1 Gbps service to another 20 million homes.

In a research note the firm expresses doubt that Google Fiber ever becomes a major deployment:

quote:
We remain skeptical that Google will find a scalable and economically feasible model to extend its build out to a large portion of the US, as costs would be substantial, regulatory and competitive barriers material, and in the end the effort would have limited impact on the global trajectory of the business.

For example, making the far from trivial assumption that Google can identify 20 million homes in relatively contiguous areas with (on average) similar characteristics as Kansas City when it comes to the most important drivers of network deployment cost, homes per mile of plant and the mix of aerial, buried and underground infrastructure, and that Google decides to build out a fiber network to serve them over a period of five years, we estimate the [total capital expenditure] investment required to be in the order of $11 billion to pass the homes, before acquiring or connecting a single customer.


Previous estimates have pegged a nationwide Google Fiber deployment at somewhere around $140 billion. Granted truly estimating the costs can be tricky given that Google is getting some real sweetheart deals that determine which cities get connected. Deals like the one they struck in Kansas City not only allow Google to cherry pick locations (even though they've installed a democratic system to determine neighborhoods), it allows them to walk away from the project entirely within two years if they get bored.

It's also difficult to project the costs incurred once the incumbent operators realize Google Fiber is a real player and pull out all the stops (and pay all the lawmakers) to make Google's deployment as difficult to possible. Right now, incumbents think Google Fiber is kind of cute -- so they haven't bothered to fire up their lawyers, lobbyists, and spin doctors.

Google could probably take over the broadband industry if they targeted particularly uncompetitive markets, they'll just ultimately lack the willpower to do so. Over the next few years, Google will likely take the inevitable turn from innovator and disruptor to turf protector, and their interest in these kinds of disruptive projects will wane. It would be very surprising to see Google Fiber expand to anything more than three or four cities in total.
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ITALIAN926
join:2003-08-16

ITALIAN926

Member

One for one match....

Hey Google, if you dont want to deal with the aggravation, partner with Verizon. For every billion you invest into Gigabit FiOS FTTH , Verizon will match it
tmc8080
join:2004-04-24
Brooklyn, NY

tmc8080

Member

What's the deal?

I thought Texas was anti-socialist in it's policies.. oh wait, that's just to the citizenry, not big business. Geographies accepting google's terms of deployment have to co-locate fiber facilities & partially subsidize them with taxpayer dollars. Usually that's not a match for a state that doesn't try to give away taxpayer monies unless it helps them [read: Republicans] politically.

Mike
Mod
join:2000-09-17
Pittsburgh, PA

Mike

Mod

Re: What's the deal?

Austin is a sea of blue in a state that is tea of red.
xenophon
join:2007-09-17

xenophon

Member

Re: What's the deal?

said by Mike:

Austin is a sea of blue in a state that is tea of red.

As is KC.

tshirt
Premium Member
join:2004-07-11
Snohomish, WA

tshirt

Premium Member

Re: What's the deal?

So if you want the peoples fiber vote democrat

OSUGoose
join:2007-12-27
Columbus, OH
Apple AirPort Extreme (2013)

OSUGoose to xenophon

Member

to xenophon
Then they should come to Columbus, OH were the same way. I'm sure our republican gov will toss some cash at them, he'll just mortgage another state property. Even if that means a Democratic Mayor gets a lil boost for it coming here, since we are the capital of the state.
me1212
join:2008-11-20
Lees Summit, MO

me1212 to xenophon

Member

to xenophon
KC isn't as blue as people make it out to be, once you get out of the inner city. Its more moderate than one might think.
xenophon
join:2007-09-17

xenophon

Member

Re: What's the deal?

N/S KC more moderate. Central KCMO and KCK are hard hard core blue. I don't think KCMO as a whole or KCK have ever voted GOP.
me1212
join:2008-11-20
Lees Summit, MO

me1212

Member

Re: What's the deal?

Thats true, but I look at the city as a whole not just parts.
xenophon
join:2007-09-17

xenophon

Member

Re: What's the deal?

And as a whole neither KCK or KCMO have voted GOP. But N/S KCMO are somewhat more moderate than central, especially North. Not sure why you brought it up as many blue cities have moderate parts of town.
iansltx
join:2007-02-19
Austin, TX

iansltx to tmc8080

Member

to tmc8080
Austin is one of the blue-est cities in Texas. And it's very pro-business, generally speaking. It's interesting seeing what happens when you have both of the above working in concert.
Austinloop
join:2001-08-19
Austin, TX

1 recommendation

Austinloop

Member

Re: What's the deal?

Among other things, the local tax payer gets increased property taxes because the city council hasn't met a company that it doesn't want to forgive taxes for several years.
elray
join:2000-12-16
Santa Monica, CA

elray to tmc8080

Member

to tmc8080
said by tmc8080:

I thought Texas was anti-socialist in it's policies..

Texas is.

Austin isn't.
wayner92
join:2006-01-17
Toronto, ON

wayner92

Member

Re: What's the deal?

See this clip from the movie Bernie for a good description of Texas:

»www.youtube.com/watch?v= ··· NHOK9FuM


The People's Republic of Austin
decifal7
join:2007-03-10
Bon Aqua, TN

decifal7

Member

hmm

If they stopped giving usf funds to att/verizon/whoever else for pretend maintenance cost then they'd have plenty

Duramax08
To The Moon
Premium Member
join:2008-08-03
San Antonio, TX

Duramax08

Premium Member

Re: hmm

said by decifal7:

If they stopped giving usf funds to att/verizon/whoever else for pretend maintenance cost then they'd have plenty

This. Screw the telcos, give it to google. They'll put it to good use.

fg8578
join:2009-04-26
San Antonio, TX

fg8578

Member

Re: hmm

said by Duramax08:

said by decifal7:

If they stopped giving usf funds to att/verizon/whoever else for pretend maintenance cost then they'd have plenty

This. Screw the telcos, give it to google. They'll put it to good use.

USF is for buildout to high cost rural areas. I don't see google building out 1G fiber to Podunk, TX anytime soon. Let's stick to the subject, shall we?

Duramax08
To The Moon
Premium Member
join:2008-08-03
San Antonio, TX

Duramax08

Premium Member

Re: hmm

I think you got the wrong topic, pal. No one is talking about fiber in Podunk, TX. Baby steps first. Lets stick to the subject, shall we?

fg8578
join:2009-04-26
San Antonio, TX

fg8578

Member

Re: hmm

said by Duramax08:

I think you got the wrong topic, pal. No one is talking about fiber in Podunk, TX. Baby steps first. Lets stick to the subject, shall we?

Have a hard time following along? Like I said, USF is for buildout to high cost rural areas, which google IS NOT DOING. Giving google the money will not accomplish its stated purpose.
ke4pym
Premium Member
join:2004-07-24
Charlotte, NC

ke4pym

Premium Member

Youtube

I wonder if Youtube and Google Maps work worth a hoot on GoogleFiber?

FFH5
Premium Member
join:2002-03-03
Tavistock NJ

FFH5

Premium Member

Re: Youtube

said by ke4pym:

I wonder if Youtube and Google Maps work worth a hoot on GoogleFiber?

?? Rhetorical question?
ke4pym
Premium Member
join:2004-07-24
Charlotte, NC

ke4pym

Premium Member

Re: Youtube

said by FFH5:

said by ke4pym:

I wonder if Youtube and Google Maps work worth a hoot on GoogleFiber?

?? Rhetorical question?

No, it's a legit question. The both suck on TWCable (both commercial and cable modem), TWTelecom, AT&T (both DSL and commercial) and a Charter based cable modem connection.

We had a lengthy thread about it over in Time Warner Cable services as well as several threads on Reddit.

fg8578
join:2009-04-26
San Antonio, TX

fg8578

Member

Re: Youtube

said by ke4pym:

said by FFH5:

said by ke4pym:

I wonder if Youtube and Google Maps work worth a hoot on GoogleFiber?

?? Rhetorical question?

No, it's a legit question. The both suck on TWCable (both commercial and cable modem), TWTelecom, AT&T (both DSL and commercial) and a Charter based cable modem connection.

We had a lengthy thread about it over in Time Warner Cable services as well as several threads on Reddit.

I've had U-Verse service; both google maps and Youtube worked fine on my connection.

ArrayList
DevOps
Premium Member
join:2005-03-19
Mullica Hill, NJ

ArrayList to ke4pym

Premium Member

to ke4pym
they work good on most ISPs
iansltx
join:2007-02-19
Austin, TX

iansltx to ke4pym

Member

to ke4pym
GMaps works fine on every ISP I've used it with.

YouTube...I feel your pain (I assume you're on TWC?). I'll bet that even 4K video from YouTube (I've streamed it before, albeit not on a monitor capable of viewing it...only 2560x1440) will work great over GFiber since there's no argument over how much the content provider should pay for the ISP's pipes.
BlueC
join:2009-11-26
Minneapolis, MN

BlueC

Member

Re: Youtube

However, it appears Google Fiber is still depending on other carriers for their routes:

»bgp.he.net/AS16591

I would have expected Google to utilize their existing network for access, but have instead rolled out new ASNs independent from their existing network. Curious to know how well these new ASNs are connected (e.g. peering at exchanges) or if they are mostly relying on carriers such as XO (which is somewhat concerning).
tanzam75
join:2012-07-19

tanzam75

Member

Re: Youtube

said by BlueC:

However, it appears Google Fiber is still depending on other carriers for their routes:

»bgp.he.net/AS16591

I would have expected Google to utilize their existing network for access, but have instead rolled out new ASNs independent from their existing network.

Keeping it independent makes it easier to sell off one day.

On the other hand, if it had been intertwined into Google's own network, then any potential acquirer would have to spend additional money replacing the routes. (Much like Frontier had to do with its ex-Verizon properties.)

tiger72
SexaT duorP
Premium Member
join:2001-03-28
Saint Louis, MO

tiger72 to ke4pym

Premium Member

to ke4pym
they work great on Charter. Might want to upgrade that 1.5mbps DSL line...
ke4pym
Premium Member
join:2004-07-24
Charlotte, NC

1 recommendation

ke4pym

Premium Member

Re: Youtube

said by tiger72:

they work great on Charter. Might want to upgrade that 1.5mbps DSL line...

You're funny. For the record, I've been packing a D3 connection since 8/2010. Currently provisioned at 30/5.
LaxerFL
join:2013-03-06

LaxerFL

Member

Re: Youtube

I get 50/10 on my sweet ass Comcast XFinity Whatchamacallit High Speed Cable Internet!!

Might want to upgrade that 30/5 D3 line...

onthecake
join:2003-08-08
Kansas City, MO

onthecake

Member

KC resident agrees

Considering the extremely slow rollout of KC over the last year I would agree with this 100%. They have not even got all of KCMO on the schedule yet.

Unless they plan on doing something different in Austin it will be years before it is fully deployed.

•••••••
themagicone
join:2003-08-13
Osseo, MN

themagicone

Member

They have the funds

Google has around 50 Billion in cash. The difference Google would not have to take a large debit to finance a large roll out. Not saying they would ever do it, but compared to VZ/Comcast/Etc, they wouldn't be burned by huge debit after the roll out.

NotHereNow
@verizon.net

NotHereNow

Anon

It takes money...

to make money. And delivering broadband isn't exactly a non-profit business (just ask Comcast and Verizon).

Join the Google fiber kick-starter now!!!

fatpipe
join:2011-10-02
Austin, TX

fatpipe

Member

Google Fiber is Well Worth the Wait

Of course, rolling out fiber takes time. It would be cool if Google could just snap their fingers and fiber appears, but that's not how technology works.

I for one, will submit my vote for Google Fiber in my neighborhood. Indeed, I have no qualms with the wait time.

"...and Google said, Let there be fiber, and "POOF" there was fiber...and the people were grateful for the fiber and the people were happy..."
iansltx
join:2007-02-19
Austin, TX

iansltx

Member

All doom and gloom...

A few counterpoints:

1. We shouldn't be riding on Google to push Fiber out to every city. They don't have the monopoly on gigabit to the home. EPB does it. Sonic does it. UTOPIA based providers do it. Anyone who can get a (relatively inexpensive) 10G pipe and doesn't mind toying with a non-monopoly pricing model on GPON (or ideally XGPON) can do it. No need to wait for Google Fiber to make its way to an area.

2. Google is a publicly held, for-profit, enterprise. As long as cities don't give Google too much preferential treatment (or give other ISPs similar treatment when they ask for it), competing ISPs don't have a leg to stand on to complain, despite the fact that Google Fiber is more competitive than most muni fiber deployments. And they have lawyers who would start a battle royale if AT&T, Comcast, TWC, Verizon et al sought to wall them of from an area.

3. If you're whining about how long it's taking for Google to install Fiber in KC (or, soon, Austin), remember that we're talking about brand new infrastructure here, in existing areas (not greenfield deployments that some fiber providers have been fortunate enough to enjoy). And Google is new to this game; deployments will speed up as they/their contractors have more time to hone their methods.

4. Where do you get "some scattered parts of Austin" from? That's making a big assumption: the assumption that much of Austin won't want GFiber enough to sign up for it in the quantity needed to guarantee installation in their area. In KC, Google adjusted these numbers slightly downward to push customer friendliness even more, so I seriously doubt that there will be large patches of Austin without GFiber, as long as we're talking about areas that are in Google's initial deployment area anyway. The only big question is how far from the city center Google will go with this first wave.
BlueC
join:2009-11-26
Minneapolis, MN

1 edit

BlueC

Member

Re: All doom and gloom...

Good points.

I think they key thing is preventing legislation from disallowing private operators to do these kind of builds themselves. A lot of people don't realize that while Google might have success in one market, a different city/state will be a completely different ballgame. Between existing infrastructure (privately-owned fiber, I'd imagine Google has contracted with private operators for dark fiber access rather then bury their own along side, with exception to the last mile), existing municipal constraints, etc. There's a lot of work towards putting fiber in the ground or getting right of ways for aerial.

There are some great options out there for residential symmetrical fiber access, problem is its isolated, but not as isolated as Google fiber. You just don't hear much about these other companies because they are not "Google".

I'd imagine most people would be happy even with 50mbps/50mbps at a reasonable price (sub $60/mo). Very few people will get use of 1gbps, not that we should make excuses, but for most companies 1gbps will need to be priced above $100/mo (just due to middle-mile constraints more than anything) and very few are willing to pay more than $100/mo for internet access.

There's a sweet spot of high speed and reasonable costs. Getting fiber in the ground certainly paves the way for future expansion, and that's what matters most.

n2jtx
join:2001-01-13
Glen Head, NY

n2jtx

Member

Location, Location, Location

While we do not have 20 million homes, Long Island is an isolated region which includes the NYC boroughs of Brooklyn and Queens. Of course we already have Cablevision and various areas covered by FiOS. Google would certainly be a welcome addition to those areas without FiOS.
silbaco
Premium Member
join:2009-08-03
USA

silbaco

Premium Member

Re: Location, Location, Location

If Verizon passed them by because they didn't think those areas were worth the effort, then Google will not even consider going there.
sparc
join:2006-05-06

1 edit

sparc

Member

Who cares if this doesn't receive massive deployment?

i will probably never see fiber where I live. That's considering i live in a decent sized area of near 200k located not to far from a major city.

Even if it takes a few years for KC or Austin, that's better than never. Even if Google supports it for 2 years, that's still better than none at all.

Google has done all the right things so far with their rollouts. Every city they rollout is a win. Most people thought that KC would be a one-time only deal and no other cities would ever be included.

I'm not much of a google fan, but I can applaud the fact that they are at least trying unlike the existing operators.

••••••

tazadar
@pacbell.net

tazadar

Anon

ads

Karl, I think you are wrong in this. Larry Page has said he wants to grow Google to $500+ billion company. Page can achieve this with Fiber. Google's revenue (95%) is from Internet advertising. TV advertising is bigger than online text/image ads. Currently, TV ads have terrible ROI for advertisers. Google Fiber can deliver better targeting for TV, thus improving advertisers' ROI. With personalized and localized data, online and TV ads will be better targeted. The gold mine is not in the subscription money (covers infrastructure/maintenance), but in the advertising money (profit). The build out cost is huge, but the pay off makes financial sense. Give Google some time, they are still learning to cost effectively and efficiently build Fiber.

Vzblows
@mycingular.net

Vzblows

Anon

Possible buy

Considering Verizon wants to take their wireless part of the company. It would be great if google bought The Fios network from VZ. After all Verizon has stated numerous times that they don't want any part of the wireline business anymore , Fios included that why they stopped expanding it
cooperaaaron
join:2004-04-10
Joliet, IL

cooperaaaron

Member

Everyone knows....

Google is not going to wire the whole US.. They will probably just wire in spots, to which I am fine with that. If they don't do my area, I can still get internet.
ConstantineM
join:2011-09-02
San Jose, CA

ConstantineM

Member

still nothing in the Bay Area?

Wish Google would take up some fibre closer to home, too. There's practically no fast residential internet anywhere in the Bay Area.

How will Google engineers be doing the next innovation, if they can't actually test it at home?

••••

fg8578
join:2009-04-26
San Antonio, TX

fg8578

Member

Well that didn't take long

AT&T Announces Intent to Build 1 Gigabit Fiber Network in Austin

»www.prnewswire.com/news- ··· 751.html

Relevant passage: "AT&T's expanded fiber plans in Austin anticipate it will be granted the same terms and conditions as Google on issues such as geographic scope of offerings, rights of way, permitting, state licenses and any investment incentives.

I assume google's contract with the City of Austin is a public record' so AT&T s/b to "opt-in" as it were to exactly the same terms & conditions.

Cheese
Premium Member
join:2003-10-26
Naples, FL

Cheese

Premium Member

What was to realize?

Google said it from the beginning this was not going to be rolled out but in select locations.
BiggA
Premium Member
join:2005-11-23
Central CT

1 recommendation

BiggA

Premium Member

They'll keep rolling out

... slowly. They'll keep going to places that are friendly to them, and are medium-density. Manhattan would be basically impossible to wire, and so would the middle of nowhere.

Tower
@cox.net

Tower

Anon

Middle georgia fiber wanted badly!!

I live in the middle georgia area where I know what a monopoly feels like cox commincations is the one,yes them!! I would gladly pay a connection/construction fee of $500 at my home if google were to offer their service in my area I know a lot of people that would gladly pay this amount!!!
Put it this way I would get google Internet so fast that I would have two providers that day cox and google fiber......
»www.fiber4middlega.org/
»www.fiber4middlega.org/i ··· ions.pdf

Google are you listening these are the people that are complaining and more in the cox area and want you here!!!

»maps.google.com/maps/ms? ··· 800f0cff