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Nationwide Google Fiber Build Estimate: $140 Billion
No, Google Won't Become a Nationwide ISP
by Karl Bode 10:37AM Monday Dec 10 2012
If you've been paying attention you know that Google Fiber was never intended to be a nationwide effort, and Google has no intention of becoming a national ISP.

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Google Fiber is simply intended to light a fire under the public relation posterior of un-competitive and lagging United States carriers, while Google tests next generation ad services and assorted technologies, and collects data on real-world broadband usage for future products.

The tease of Google fiber coming to your neighborhood is something that generates an endless amount of free PR for Google nationwide, thanks in large part to the public's dissatisfaction with the price, speed and availability of existing services. While Google Fiber will probably reach one or two more small to mid-sized cities over the next five years, national deployment simply is never happening.

The biggest reason of course is the price tag on such a project. A research note this week by Goldman Sachs pegs the price of national deployment at $140 billion, with less than half of the country costing $70 billion. Even with Google's deep pockets and $45 billion in available cash, that's a steep hill to climb. Notes the analyst:
Building out the infrastructure will be expensive. In his September 17 report Still Bullish on Cable, although not blind to the risks, Goldman Sachs Telco analyst Jason Armstrong noted that if Google devoted 25% of its $4.5bn annual capex to this project, it could equip 830K homes per year, or 0.7% of US households. As such, even a 50mn household build out, which would represent less than half of all US homes, could cost as much as $70bn. We note that Jason Armstrong estimates Verizon has spent roughly $15bn to date building out its FiOS fiber network covering an area of approximately 17mn homes.
While not something Google would want to handle alone, that's certainly a doable sum for a country whose military gobbles up that kind of money in a heartbeat on any random afternoon. The problem is there simply is no political will to build a nationwide fiber to the home network, nor is there the motivation to impose rules aimed at shoring up last-mile competition. The current telecom zeitgeist in the United States is to build the bare minimum, charge as much as humanly possible for it, then insult and attack anyone who dares to dream bigger.

Still, Google Fiber continues to show people what is possible on a region-by-region scale -- and based on the public's obsession with the project that inspiration isn't a bad thing. Just don't get your hopes up. One or two fiber to the home deployments certainly doesn't magically cure this country's lack of serious broadband competition, the result of which is high prices and huge swaths of the country stuck on sub 3 Mbps DSL.

174 comments .. click to read

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united state

2 recommendations

The numbers don't make any sense

$70 billion for half the population, $140 for the whole population?

No way.We have had numerous discussions over the years about how the rural population is extremely expensive to cover. I would expect numbers more like the same cost for the first 90% of the population as the last 10% of the population--not the same cost for the first 50% of the population and the last 50% of the population.


Union City, GA

2 recommendations

Google Fiber

Has anyone noticed that the country that helped invent the Internet has some of the slowest Internet speeds compared to other countries? I've spent some time in Asia, Japan, china, and Singapore to be more specific. There are fiber networks all over the place. If Google went nationwide this would create numerous jobs and improve the economy, I guess that makes too much sense

Minneapolis, MN

2 recommendations

reply to Kommie

Re: Cheap

said by Kommie:

said by AVD:

This should be a national priority, like building out the Bell system was. Of course, all the required government regulation would probably increase costs 10 fold, but still worth it..

If they stop building wasteful Nuclear Submarines or Aircraft Carries we could actually accomplish this. Defense Spending and our Military Industrial Complex is what is holding us back.

Right- if municipalities like Kansas City weren't spending all their money building aircraft carriers and nuclear submarines, there'd be plenty of money.

Take a moment to think before typing your usual tired, vapid leftist nonsense. For a change.