When Google announced plans in 2010 to jump into the broadband business, the companyreceived more than 1000 applications from communities hoping to be selected for Google Fiber, which promised gigabit-speed Internet at low prices or even free Internet for seven years if you chose a slower speed.
As we head into 2014, Google has delivered super-fast Internet to exactly one place,greater Kansas City; it's just now rolling out the service to Provo, Utah—where it purchased an existing municipal network for $1; and has announced plans for Austin, Texas, in 2014.
After that, who knows? Google has not released any further scheduling information.
But if you're Verizon, Comcast, or AT&T, you might be breathing a little easier these days, knowing that Google apparently is not planning to buy up all that unused dark fiber and compete in the residential broadband market on a nationwide scale—at least for now.
Why enter networking?
There has always been speculation about Google's motives, and, Google being Google, answers have been hard to come by. Is this just an experiment? Another attention-grabbing sideshow, like those mysterious barges floating in San Francisco Bay and Portland, Maine? Is Google trying to compete head-to-head against the incumbents? Or is Google trying to nudge the incumbents to step up their broadband game by introducing the specter of competition? After all, faster Internet means Google can deliver more ads to more end users, which is how the company makes its money.
As Google spokesperson Jenna Wandres puts it: "The simple answer to why' is this: it's for Google users. They keep telling us that they're tired of waiting for incredibly slow upload and download speeds that often take hours to just transfer an album of photos from one location to another."
According to Wandres, it's all about speed. She pointed out that Google developed the Chrome browser to make the Internet experience faster, but it can only be as fast as the Internet connections and the hardware and networks that support that infrastructure. So now, they're installing Google fiber, to make it faster.
"For the next big leap," says Wandres, "Gigabit speeds will bring new apps and talented developers to the table, who can and will take advantage of these remarkable speeds." She explains that organizations such as Kansas City Startup Village (KCSV)—an ecosystem of grassroots individuals working together to create an entrepreneur community—thrive in this type of environment; that is, an area where high-speed Internet allows developers to collaborate and share ideas.
Competition is good news
According to Forrester analyst Dan Bieler, Google Fiber "is good news because competition increases the pressure on carriers and cable providers to bring true broadband service to more households and businesses, if they want to compete effectively with Google. In my view, it is unlikely that Google fiber will target rural areas, but it's clearly an interesting option for Google to target higher-income urban areas as well as central business districts.''
"Competition is the main driver for improved services, and this will continue to be the case," adds Ian Keene, research vice president at Gartner. "But Google has discovered that rolling out its services is taking longer than they first thought. If they carry on at this pace, they will not be a threat beyond a handful of cities; not for the foreseeable future, anyway. However, where they are active, we will and have seen the competition fight back with improved subscriber offers."
For example, after Google announced plans to deliver gigabit Internet to Austin, AT&T announced plans to up its game in Austin. AT&T has promised to provide ultra high-speed gigabit Internet (called GigaPower) to its Austin users in December, with initial symmetrical speeds up to 300Mbps and an upgrade to the 1Gbps by mid-2014 (at no extra cost, of course).
But it's still too early to tell whether Google's efforts will prove to be economically feasible, or whether Google will continue to expand beyond the three locations already identified. "Google, like many others, has learned that the enormity of the costs involved in building broadband infrastructure creates a dilemma," says telecom analyst Craig Moffett. "It is extraordinarily difficult to earn a reasonable return on building an infrastructure to compete with cable. Verizon tried with Verizon FiOS and, after reaching only 14 percent of the country, eventually conceded that further expansion was just not economically justified."
Moffett explains that at least Google is giving it the old college try; but the markets they have chosen, so far, are all unique cases. "For example," he says, "In Provo, they're building on a network that was already there. In Austin, we'll get a better sense of what the economics might actually look like. At this point, I think it is reasonable to conclude that fiber-to-the-home deployments like these will remain the exception rather than the rule."
How it works
With more than 1100 applicants, Google could choose the communities that offered the most advantageous terms and conditions. These installations require access to utility poles, roads, and even substations in order to lay their fiber networks, so applicants had to be willing to expedite that process.
In the case of Kansas City, Google only extends fiber to neighborhoods with a certain number of preregistered customers.
According to Wandres, locations must be fiber friendly, technological leaders, and residents must show a genuine willingness to work with Google; that is, to be flexible, move quickly, and cut through the red tape.
"It's a long process and requires a lot of work," Wandres says. "There must be a strong demand for fiber among the user base (for those who are excited about a technological hub) and for entrepreneurs who can advance the technology. In Kansas City, the Mayors' Bi-state Innovation Team came up with a playbook for how Kansas City could benefit from fiber. And there's another group now tasked with following through on those plans.''
In Kansas City, subscribers can get gigabit Internet for $70 per month or the gigabit service plus TV (200 channels, HD included) bundle for $120 a month. Both of these options provide free installation plus all the equipment necessary to enable the service to function, such as the network gear, the storage device, and the TV box. Additional benefits include 1TB (terabyte) of storage across Gmail, the drive, and Google+ photos and, for the bundle, one Nexus 7 tablet.
Kansas City residents who want Internet access, but may not classify themselves as power users, can get Google's free Internet service, which runs at 5Mbps. The free service does require a one-time installation fee of $300 (or $25 a month for 12 months), then the service is free for at least seven years.
"At the end of seven years, we will begin charging the market price for comparable speeds—which should be $0, as long as Internet speeds increase as much as we hope over the next few years," Wandres adds. "In other words, we think that in seven years, Internet speeds should be ubiquitously faster in America and, by that point, nobody should have to pay for a connection speed that is 5Mbps download/1Mbps upload."
Brittain Kova, co-leader and communications pilot at KCSV says, "With regards to speed, nobody has been able to break the gig. We've tried. Downloading tons of files while gaming and running multiple videos simultaneously and we still barely see a dent. What companies are experiencing is an extreme amount of time savings; for example, www.sportsphotos.com, a company that moved to the KCSV from Springfield, Missouri, is now able to upload thousands of high resolution photos in a matter of hours; a project that in the past, took days, if not weeks to accomplish."
"In addition," says Kova, "Google fiber has been the catalyst that's brought the community together in ways that may have never happened, or certainly would have taken years to see the outcomes. It's bringing like-minded people who want to innovate and collaborate, who know we (KC) have a short window of time to do something big, and we're really leveraging this opportunity to do great things for the community as a whole. From households to startups, corporate and civic, we're all working together for the first time in years and it's exciting."
Based on the Google fiber city map, the Kansas City project is still in progress. Thirteen more cities in Kansas and six additional cities in Missouri are scheduled next for this service.
Next up, Provo, Utah
The situation in Provo is somewhat different, because Google purchased the existing iProvo city network for $1. So, Google didn't have to start from scratch, it just needed to upgrade the existing network, which was built in 2006.
In a recent blog post, Provo Mayor John Curtis said, "Unfortunately, while we've had the desire, we haven't had the technical know-how to operate a viable high-speed fiber optic network for Provo residents. So, I started looking for a private buyer for the iProvo network. We issued a Request for Qualifications and a Request for Proposal and even hired a private consultant to guide our efforts. [And now] under the agreement, Google Fiber is committed to helping Provo realize the original vision."
Provo's customer plan; that is, the monthly price for gigabit Internet or the Internet/TV bundle is the same as Kansas City ($70 or $120, respectively) except that everyone in Provo pays the installation fee of $30, not just the users who sign up for the free 5Mbps/1Mbps service. And, like Kansas, the free service is only free for seven years (or longer, based on the market price for comparable speeds after seven years).
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