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Summary:

Google Fiber started as a project to show how broadband could be improved in the U.S. On its earnings call yesterday its CFO shared a statement that shows it had accomplished that mission.

Google Fiber brick

Google may still have plans for the spread of its fiber-to-the home network to more cities, but on the search giant’s earnings call comments from the CFO indicate that Google has accomplished its initial mission when it came to rolling our fiber-to-the-home services. On Wednesday Google CFO Patrick Pichette, said in response to a question about Google’s long-term strategy on fiber:

“I think that everybody now in the industry is talking about the gig. It’s becoming the standard and we are absolutely thrilled for all of the users out there that can think they own 1 gigabit of symmetrical Internet at a reasonable price.”

In other words, Google has done what it set out to do, which was to upset the status quo in the U.S. broadband market. At the time, consumers were resigned to slow upgrades of the networks in respectable increments led by cable providers who typically provide the fastest networks, but also have data caps. When the service launched, Google executives repeatedly told a story about how they realized they shouldn’t just whine about poor connectivity, they should do something to make it happen.

Google Fiber was initially a way to show that delivering a fiber network could be built and to get consumers, regulators and elected officials excited about what a modern network could do. From the initial launch in Kansas City Google officials said it would be profitable to deliver a gig at $70 a month. Last year, Google amended that original mission to say that it wants to use Google Fiber as a moneymaker.

But that first goal is certainly accomplished. Now we have ISPs like AT&T, VermontTel, CenturyLink and C-Spire rolling out gigabit networks, and even providers like Comcast and Time Warner Cable boosting speeds on their own networks as well as pushing for more ubiquitous Wi-Fi to counter the gigabit threat.

Google also pushed municipalities to get serious about their broadband quality and figure out ways to make it easier to install fiber to the home networks without running into impossible rules and red tape. As Blair Levin, the executive director of Gig.U has told me on several occasions, Google has changed the cost-and-benefits analysis that cities do when considering their broadband infrastructure.

Meanwhile the fiber service is sparking conversations about gigabit apps, how we regulate or even write terms of service for broadband access and driving up expectations about service for low-income areas. And yes, everyone’s excited about a gig. Of course, the next hard challenge to solve in U.S. broadband will be figuring out how to serve rural areas with uncapped, high-speed broadband. Maybe Google’s Loon project?

  1. C’mon Stacey. I’ve know you over the years to write more accurate pieces than this one. Pat Google on the back all you want, but don’t blindly agree with them about something you know isn’t true.

    Yes, there are select ISPs in select towns and smaller cities (we can count on a few hands how many) that are rolling out “gigabit” networks. But that’s it. There is no great movement afoot because of Google nor anyone else. And AT&T is certainly not a participant here with the exception of the specific locations where they face direct competition with Google Fiber.

    Besides, this was never about speed (or at least it shouldn’t be). Its about handing over our economic future to a few mega-telecoms, of which Google is one. When we as citizens are 100% reliant on the particular feelings of our telecom overlords regarding when they feel like rolling out upgrades or not raising prices, when we sign over our most essential means for communication to bridge trolls with their hands out for more money, we haven’t lost the battle: we’ve handed over the reigns before we’ve even started fighting, and it won’t matter how many beneficent Google-like companies want to step in and provide solutions for a few towns and cities. Their work will never bring us the freedom to be masters of our own means of communication.

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    1. You are mistaken on the telecom comparison. Google’s core business model continues to improve the better internet everyone has, while the incumbent telecoms only have ground to lose by making your internet faster. Their business model is more like a drug cartel where they artificially limit a resource that is abundant and monopolize areas so no one else can even build a network.

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      1. The technology Google uses to deliver their gigabit service in KC was developed by Verizon, a telco. If you look at the speeds that cable and telco firms have offered since the dawn of broadband in the late 90s, you find a clear trend toward higher capacity connections. In fact, very few people subscribe to the top speeds today, so the networks are not holding us back.

        Now if you want to talk about prices that’s an interesting discussion, but speeds are fine.

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  2. In other words, the project is hemorrhaging losses and Google has decided it shall go the way of Google Reader. The smartest thing they did was use the xPON technology that Verizon pioneered, but they have apparently been unable to sign up a significant number of subscribers. The pending merger of Comcast/TWC is also a problem for them because they refuse to compete with Comcast and that’s increasingly hard to do.

    But maybe “mission accomplished” means what it meant in the early days of the Iraq invasion: “now comes the hard part”.

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    1. How is Comcast out of reach? They offer slow speeds (compared to fiber), shoddy network quality, and the worst customer service ratings of any U.S. company. The other cable companies aren’t much different, they are spending a lot of money trying to outlaw municipal networks so they can keep their monopolies.

      The fact is telecom and cable companies have stolen billions of dollars in subsidies with their promises of network upgrades that never happened and never will happen.

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      1. Google has consistently refused to go toe-to-toe with Comcast; they have only announced new builds where TWC is the incumbent cable provider. The opportunities to avoid Comcast will become much harder to find after the merger.

        Comcast offers speeds up to 500 Mbps, and has the potential to go as high as they want; 10 Gbps over coax is feasible, and they already offer all-fiber 10G connections to businesses. And no, they don’t have the worst customer service ratings in the US. Broadband companies around the world tend to have low customer service ratings, especially the ones like Free.fr that are touted by American idealists for their alleged perfection. Look it up.

        Cable companies haven’t made any upgrade commitments they haven’t kept. You’re confusing Bruce Kushnik’s claims about New Jersey Bell’s 1992 commitments with those of the industry as a whole, not very good use of your brain.

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        1. Let’s see where to begin. Co-ax will never be as fast as fibre, 500mbs is available in a tiny portion of homes (and is obscenely expensive by global standards) and NPS and customer sat scores are TERRIBLE for US telecoms. As you slike to say, look it up.

          The debate has changed. It is obvious to see when following the number of municipal and PPP gigabit projects that are in the planning and execution stages. Google deserves huge credit for that. The ITIF will simply never give it to them.

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          1. Cable is mostly a 1-way medium. Fundamental re-architecting needs to occur for full-duplex. The latter will be driven by HD telepresence, mobile BB, and IoT.

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  3. Stacey, you didn’t mention the recent speculation over them moving into SMB and also some speculation on wireless. Clearly that wasn’t asked on the call; and so analysts are thinking of ways that Google can scale the model and approach.

    I agree with Dana, and in part Richard, that perception that is not followed up by demonstrable success is not really game changing. To get to ubiquitous gig we need to fundamentally disrupt the last mile business model and its pretty clear from reading the press that Google has hardly moved the needle on that front.

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  4. “upset the status quo” yeah right, Google Fiber using the exact same business model as the MSOs and telcoms to deliver a “bundle” what a joke

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