Yes, It Would Be Prohibitively Costly For Google To Offer Google Fiber Everywhere, But It Shouldn't Have To

from the think-outside-the-box dept

A bunch of folks have been sending over Business Insider's coverage of a Goldman Sachs Report concerning Google Fiber, and how much it would cost to roll it out nationwide. The estimate from BI, which is what lots of people are quoting, is that it would cost $140 billion. From the quote presented in the article, it's not clear if the Goldman Sachs report actually uses that number of not. The only number actually quoted is that it would cost about $70 billion to cover less than half, so I don't know if the BI reporter is just extrapolating in a manner that seems ridiculous (if covering half the country is $70 billion, that does not mean covering the other half is also $70 billion -- it doesn't work that way):
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.
Of course, even if we accept this number to be true -- even though that seems unlikely to be the case -- it seems to miss the point. Google has been pretty clear all along that the goal of the Google Fiber project was not to turn Google into a national broadband competitor, but to drive others to really up their game by showing what's possible: super cheap, super fast broadband with friendly customer service.

And, while Google shied away from its initial promise to have its network open for other services to compete, it still seems like that might be a better way to offer such a broadband. That is, rather than dumping the expense entirely on one company, imagine if it were split up among a bunch of companies (or even individuals), with a promise of openness and competition at the service level, rather than at the infrastructure level. In effect, this is what is happening down in Australia, via government fiat, in which it's building out a national fiber network, with plans to have it open for competition at the service level. That way, the costs of the infrastructure are spread out, but it opens up massive new opportunities for service providers if they provide good service.

The problem -- and the reason such a thing is unlikely to move forward -- is, once again, this insistence by companies that there's more value in owning the pipe entirely, and keeping it locked up and scarce, even if it means less overall efficiency and less overall opportunity. A long term view would recognize that investing in the best network possible, but sharing those costs, and then letting the real competition happen at the service level, would benefit everyone. Instead, we end up with fighting over slow, limited and fragmented networks. It's too bad.


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    fogbugzd (profile), Dec 12th, 2012 @ 7:30am

    Both Google Fiber and the Australian model are based on promoting competition. Unfortunately in the US corporate-think (and thus lobbying) is all based on the assumption that competition is bad.

     

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      gorehound (profile), Dec 12th, 2012 @ 9:08am

      Re:

      And we the Consumers get the shaft by these large Telcos.
      I am awaiting the day we finally rise up against our Corporate Masters and the Corrupt Politicians.

       

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      Anonymous Coward, Dec 12th, 2012 @ 10:12am

      Lobbying

      Lobbying is only successful as far as the corrupt Politician.

      Govt is the problem, just look at the monopolies they allow in utilities, broadband, health insurance, etc.

       

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    crade (profile), Dec 12th, 2012 @ 9:12am

    Did you just group google and friendly customer service in the same article with a straight face?

     

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      fogbugzd (profile), Dec 12th, 2012 @ 11:24am

      Re:

      >>Did you just group google and friendly customer service in the same article with a straight face?

      Well, it's all relative. Google has a reputation for bad customer service. But we are comparing them to most of our US ISP's and Telco's. In a room full of black cats, a dark gray cat looks white.

       

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    Lord Binky, Dec 12th, 2012 @ 9:27am

    Sounds alot like line sharing and Title II rules that are like a holy symbol to a vampire for ISPs.

    But we know there is no way this makes any practical sense and can just be done with the whole impractical concept.
    What you're asking for is like being able to choose a different long distance carrier for your landline even if they don't own the copper of that land line to your home. If they want to provide you long distance phone service, they should have to run that copper wire all the way to your house just like everyone else does, that's the only way that's fair.

     

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      Mark Murphy (profile), Dec 12th, 2012 @ 9:46am

      Re:

      "What you're asking for is like being able to choose a different long distance carrier for your landline even if they don't own the copper of that land line to your home"

      You mean, like the US has had for the past quarter-century or so?

       

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    out_of_the_blue, Dec 12th, 2012 @ 9:33am

    Some translations from Mike-speak are required:

    "And, while Google shied away from its initial promise" -- substitute in "lied about" and/or "insanely mis-under-estimated costs for".

    "with a promise of openness and competition at the service level" -- Means gulling the public to pay for infrastructure that Google will utilize (yet pay almost no taxes for: recall its 2.4% rate), and we've also no assurances it'll keep that promise, either.

    "In effect, this is what is happening down in Australia, via government fiat, in which it's building out a national fiber network, with plans to have it open for competition at the service level. That way, the costs of the infrastructure are spread out, but it opens up massive new opportunities for service providers if they provide good service. -- Mike here advocates PURE fascism, where COSTS are paid by taxpayers (not least by eternal debt), but the PROFITS go to private corporations (also forever).

     

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      Anonymous Coward, Dec 12th, 2012 @ 10:02am

      Re: Some translations from Mike-speak are required:

      "Mike here advocates PURE fascism, where COSTS are paid by taxpayers (not least by eternal debt), but the PROFITS go to private corporations (also forever)."

      You clearly don't understand how these things go. The alternatives you have are:

      a) State builds up infrastructure with taxpayer money and hands it to private/public company. That company gets a monopoly on communications, which means terrible service for everyone (0 competition means 0 incentive to get better).

      b) State builds nothing and lets private companies handle the infrastructure building. Only VERY RICH companies can afford the bill for such a thing, which means that you'll end up with a mono/duo/trio/etc-poly in communications, which means terrible service for everyone, because there is very little competitive pressure, and you own the infrastructure anyway.

      c) State builds up infrastructure with taxpayer money and basically says "anyone that wants to use the infrastructure is free to do so, so long as they follow 'these rules' and pay X amount which we'll invest in upgrading the infrastructure".

      The choice here is obvious, I think. Compare Internet speeds between countries that implement a/b and countries that implement c and maybe you'll get a clue.

       

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      Jeff (profile), Dec 12th, 2012 @ 10:04am

      Re: Some translations from Mike-speak are required:

      OOTB - I'm sure if Google showed up tomorrow to give you $100M to make your movie - you'd find a way to bitch about it...

       

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      Anonymous Coward, Dec 12th, 2012 @ 5:37pm

      Re: Some translations from Mike-speak are required:

      Umm... Hello? Electric company? Gas company? Don't tell me you believe they built their infrastructures from the ground up without government aid. If you use either, then you're a hypocrite, and need to get off the grid RIGHT NOW! Can you do it? And get off the internets! OMG! The government helped build those out and the profits go to private companies!!!!!

       

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    MRK, Dec 12th, 2012 @ 9:35am

    If only there was some kind of Universal Service Fund that would help establish data service across the USA.

    The FCC could even put a surcharge on every phone, internet, and mobile carrier bill, so it is paid for by the end users for the benefit of all. It could pull in as much as... 8 billion dollars a year.

    Of course, the telecom operators would NEVER just pocket the money from such a fund and make no effort to lay new fiber.

    /Sarcasm.

     

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      nasch (profile), Dec 12th, 2012 @ 4:26pm

      Re:


      Of course, the telecom operators would NEVER just pocket the money from such a fund and make no effort to lay new fiber.


      I was having a good day until you reminded me about that...

       

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    Anonymous Coward, Dec 12th, 2012 @ 9:38am

    the reason, surely, that Google has installed fibre where it has is because the companies that should have done so are making so much money from offering a shit service and getting away with it, they refuse to do anything else. what is more ridiculous about the situation is that the other companies are moaning like hell at what Google has done. if they were that worried or bothered, the only one stopping them from implementing the service was themselves and their own greed!

     

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    Anonymous Coward, Dec 12th, 2012 @ 9:49am

    Just to show an alternative approach:-
    Lune Valley fiber. Put in by the people it serves.

     

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    Anonymous Coward, Dec 12th, 2012 @ 10:13am

    This comes out to something like $1500 per home. I don't know about you but I'd be more than happy to pay twice that much to get my home hooked up with fiber. I realize that EVERYONE would have to sign up, but I'd be willing to foot the bill for a lower income home in order to get something like this in my town.

     

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      John Fenderson (profile), Dec 12th, 2012 @ 11:45am

      Re:

      This comes out to something like $1500 per home. I don't know about you but I'd be more than happy to pay twice that much to get my home hooked up with fiber.


      I wouldn't. The cost/benefit ratio is all wrong for me on that one.

       

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      HavaCuppaJoe, Dec 13th, 2012 @ 9:38am

      I think you already have.

      What strikes me as odd about this whole conversation is that everyone seems to forget that you've already been paying for it. Everyone that has ever had a telephone since 1996 has been paying a surcharge on ever single phone bill. This money was supposed to go to infrastructure development. The CEOs of all of the telcos went in front of Congress to beg for the right to charge customers for the infrastructure build-out. They basically promised Congress that they'd deliver fiber to everyone's home. (40Mbps was the happy speed during that conversation, I believe).

      You've been paying for the fiber sin 1996. Where's your damned fiber? Where's MY damned fiber?

       

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    Robert, Dec 12th, 2012 @ 10:31am

    I'm surprised Google doesn't just try a different strategy. Everyone would love Google Fiber, but maybe they should just build Google Fiber in some select markets. Cities which which are not huge, but are not small, like Boston, Seattle, San Fran, Austin, Minneapolis, etc. The existing telcos would freak if they got clobbered in each of these markets and had only the suburbs. I think it would force the competition. Just a thought, that Google Fiber should compete in some of the top markets then work your way down to suburbs etc.

     

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    Jonathan, Dec 12th, 2012 @ 10:53am

    Fiber Networks Cost $$$

    I build and design fiber networks for an enterprise fiber provider and can tell flat out that it is ridiculously expensive to build out fiber. In the Northeast a rough estimate is $50k per mile and that doesn't include any electronics. That just covers the materials, licensing and labor. You can add at least another 25% to the cost to light up the fiber. The $50k doesn't cover extras like running along bridges, fixing collapsed conduits, digging/trenching under roads and highways. $50k per mile covers the easy stuff.

    $70B for half the country sounds conservative to me.

     

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      Bengie, Dec 12th, 2012 @ 11:10am

      Re: Fiber Networks Cost $$$

      According to GPON research over the past 10 years on the average cost of installation for a medium sized city, the datacenter, all electronics, and fiber to the curb makes up about 40% of the installation cost. The other 60% is truck rolls to hook each house from the curb to the house and install the ONT(end point).

      Fiber and electronics are actually the cheapest part. The most expensive part by far is sending people to each house once the infrastructure is in place.

       

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    Zos (profile), Dec 12th, 2012 @ 10:59am

    i don't care about what it costs to get it to everyone. all i want to know is who i have to blow/bribe/murder to get it for ME!

     

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    Anonymous Coward, Dec 12th, 2012 @ 11:00am

    Quote:
    The problem -- and the reason such a thing is unlikely to move forward -- is, once again, this insistence by companies that there's more value in owning the pipe entirely, and keeping it locked up and scarce, even if it means less overall efficiency and less overall opportunity.


    Is not really the companies that are a problem, they are doing what they do best and that is look after only themselves, the real problem is a government that listen to those companies and allow to be infiltrated by agents of those companies.

    People could build their own networks, they already pay for it, so it is not like simple people can come together and pay someone to build it for them, but they can't, endless regulations and exclusionary rules make that almost impossible for people to actually build anything by themselves.

    In Australia there is a political will to build it for some reason maybe to get easier access to the data who knows but there is a will, that will in the US is non-existent, and so is competition.

     

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    Anonymous Coward, Dec 12th, 2012 @ 11:10am

    Google has the money to do it.

     

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      Wally (profile), Dec 12th, 2012 @ 1:27pm

      Re:

      No they don't. Hate to say it but Apple currently has the most liquid revenue at about US$120-Billion. In order to get this done on a national scale, it would cost US$140-Billion to do it.

       

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    JWW (profile), Dec 12th, 2012 @ 11:20am

    I just want to cheer Google on

    I just want to cheer Google on as they move into more and more markets and DECIMATE the competition.

    The cable and phone company ISPs have forgotten how to compete.

    All I want is for Google to move Google Fiber into 10 or so major metropolitan areas and take 90% of the competitors business because they actually give a damn about the customer!!!

    I love watching Time Warner cry for mommy government to come and save them because Google is taking their customers. Boo effin hoo.

    The ISPs are trying to tell us that we need (even want WTF?) bandwidth caps. Then Google moves into KC with a service 1000% better than what the telcos and cable companies are offering. Its called COMPETITION assholes.

    I don't care if Google can get this deployed nationwide. I just want them to HURT the other ISPs.

    Isn't it telling that in today's day and age, in many industries, customers are forced to do business with companies that they hate and abhor.

    But companies better beware because if a competitor comes in and actually is just plain marginally nice to the customer they will crush the incumbent monopolies.

    No if Google will only start to move to becoming a wireless provider. ;-)

     

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      Wally (profile), Dec 12th, 2012 @ 12:01pm

      Re: I just want to cheer Google on

      It should be noted that if Google wanted to hurt the competition, they could have deployed it elsewhere than Kansas City, Missouri. It cost them $70-Billion to implement their own lines.

      Mike Mansick, this isn't an attack so here goes. It's not as if they shouldn't have to, they tried to make it exclusively their project, they need a joint effort to make it nation-wide, and Google wants it done Google's way with third parties. There was one other company who refused third party help in revolutionizing the game console market...Nintendo wanted full control over the proposed SNES CD game content and would not allow Sony to develop games with them in partnership. Nintendo chose the Philips CDi over the partnership project SNES CD with Sony because they figured Philips to be less conpetition. There is a point here.

      The point that I see here is that Google, acting like Nintendo, sees other Telco's and third party organizations who could help fund a *nation wide* fiberoptics system, as their Sony. They are snubbing their potential partners to stay competitive the way Nintendo did with Sony...we all know the results of that (Three shitty Zelda titles and Hotel Mario for those who don't know).

      So to avoid corporate embarrassment they must get over themselves to be able to compete.

       

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        Anonymous Coward, Dec 12th, 2012 @ 1:13pm

        Re: Re: I just want to cheer Google on

        "It should be noted that if Google wanted to hurt the competition, they could have deployed it elsewhere than Kansas City, Missouri."

        That is of course IF that was the goal. Which is was not. The goal, was instead to show that good bandwidth can be provided at a reasonable cost TO THE CONSUMER. And their point has been well and truly made.

        In regards to deployment, as you may or may not know, Google basically said, "Hey, we're going to try out this Google Fiber thing. We haven't decided where yet. So YOU tell us where we should deploy it and why. Remember, creativity isn't necessary but it sure might help your case."

        And lo and behold, Kansas City (on both sides) won.

        As for the rest of your comment, well it's largely irrelevant. Google Fiber is THEIR project. It's got little to do with the other telcos. As for nationwide deployment, also still irrelevant. You're starting off with the assumption that Google chose not to work with others and then running from that point on. You fail to, for whatever reason, realize that the telcos hate competition and in the majority of the country have monopolies on deployment. Monopolies that they themselves advocated and lobbied for, mostly with local governments. Meaning, even if Google wanted to work with others, they are unable to do so. Except in specific cases like the one in Kansas City, where the local government asked them to step in and provided them some needed infrastructure and resources to do so. In the hopes that Google stepping in would provide the needed incentive for the other telco operators in the area to step up their game and give the customers what they want, better services at cheaper prices.

        The rest of your comment is largely a shot a Google and fails for the reason I already listed above. Namely, that you start with an incorrect assumption and run from there.

        As for that shot at Google about competing, well... I don't know what to make of it. I suppose I could say something along the lines of, "Rather than litigating away the competition over moronic patents granted to them, perhaps Apple should let their products truly stand on their own merits. You know, if they're really as great as some say they are then they'll sell well." But of course if I did so I'd expect an Apple defending response from you, which I'd largely ignore because I don't care one way or another about any company, but mostly because I don't care about hearing about Apple not being a baby/competing/wre wre wre from you. [shrugs]

         

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          Wally (profile), Dec 12th, 2012 @ 1:38pm

          Re: Re: Re: I just want to cheer Google on

          Your last paragraph completely invalidated your rebuttal to me. If you want to step off your blindness and look at what Google wants to do and where they could have EASILY deployed their service, then I will talk reason with you. You didn't read the article and stepped out of line when you accused me of being a fan boy. If you take the time to research things instead of bashing me for saying the word "Apple" when I clearly haven't at all in my comments unless stating that if Apple, with its $120-billion a year liquid revenu earnings, could not even afford to do this alone...you would see a very reasoned critcizm.


          As for it's parallel for acting like Nintebdo towards Sony I've the whole Philips CDi debacle....do your video game history...you might see how Google's actions in not putting effort to make a joint effort mirror that of Nintendo.

          In saying that I have hit 2 of your sacred cows it seems.

           

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            Anonymous Coward, Dec 12th, 2012 @ 1:44pm

            Re: Re: Re: Re: I just want to cheer Google on

            So what you're saying is, "Yes, AC, everything you said is correct. However, I will use your not quite shot at Apple to dismiss you outright and feel smug about it in the process. Congrats, you win."

            That about right?

            Because I didn't actually call you a fanboy, I just said I don't want to hear you defend Apple or anything. I don't know if you do or not. But I'll take it based on your answer that you may be one. No one labels themselves as something that someone hasn't stated. And the reason I mentioned Apple was because when I hear Google the only other company as large I can think of is Apple. As far as popular products goes.

            And oh yeah, I read the article. And the one on The Verge. Still awaiting the apology for you being wrong. [looks at wrist watch]

            Also, I never said Apple could take on this kind of project, no clue where you're getting that from. My only reason for mentioning Apple was you saying if Google wants to compete. And frankly, by and large, quite a few sites have pointed out exactly what I wrote. That if Apple's products are able to compete they should be allowed to do so, without getting courts involved.

            But like usual, let's bring up Apple. Yay!

             

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              Anonymous Coward, Dec 12th, 2012 @ 2:06pm

              Re: Re: Re: Re: Re: I just want to cheer Google on

              Lay off him. You did in Too Long Do Not Read format:

              "As for that shot at Google about competing, well... I don't know what to make of it. I suppose I could say something along the lines of, "Rather than litigating away the competition over moronic patents granted to them, perhaps Apple should let their products truly stand on their own merits. You know, if they're really as great as some say they are then they'll sell well." But of course if I did so I'd expect an Apple defending response from you, which I'd largely ignore because I don't care one way or another about any company, but mostly because I don't care about hearing about Apple not being a baby/competing/wre wre wre from you."

               

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      John Fenderson (profile), Dec 12th, 2012 @ 2:01pm

      Re: I just want to cheer Google on

      I absolutely don't want Google to be the sole ISP around. I don't want any isp to be the only provider. We have too little choice as it is.

      Besides, I do everything I can to avoid doing business with Google. The last thing I need is to be effectively forced to do business with them.

       

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        William Chambers, Dec 12th, 2012 @ 2:09pm

        Re: Re: I just want to cheer Google on

        Google beats the pants off WoW, AT&T and TWC any day of the week. The last thing I need is to continue to be forced to do business with them.

         

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          Wally (profile), Dec 12th, 2012 @ 2:18pm

          Re: Re: Re: I just want to cheer Google on

          But that creates the Telco "monopolies" that people keep griping about. The reason we have different telco's per region in a seemimg oligopoly format is that each region here in the US had contracted with different carriers. The cables were already in place for this to happen, they all divided us up. Don't go griping when infrastructure doesn't give you a choice. My erea of Ohio has 2 main competitors for Internet...Time Warner (cable company) and CentryLink (phone/DSL) company. I'm getting 30 megabits currently and if Google came in it might lower my bill a bit for Time Warner to at least stay competitive.

           

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          John Fenderson (profile), Dec 12th, 2012 @ 2:41pm

          Re: Re: Re: I just want to cheer Google on

          I don't want to eb forced to do business with any of them. In my opinion, none of them is more or less acceptable than the others (including Google). Except AT&T, I suppose. They're the worst.

           

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        Wally (profile), Dec 12th, 2012 @ 2:12pm

        Re: Re: I just want to cheer Google on

        John, would you agree with me in saying that Google could easily do this through Joint Venture with say Verizon or Time Warner? It seems very possible to be able to do that. My only gripe is that Google isn't using venture capital methods to fund a nation-wide project when they had the potential to do this.

         

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    Wally (profile), Dec 12th, 2012 @ 11:27am

    Well, there goes all those lovely predictions from certain users on here basically stating Google would expand.

    ....I now await to excep apologies :-P Though I don't expect them.

     

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      Wally (profile), Dec 12th, 2012 @ 11:32am

      Re:

      It should be noted that Google, instead of trying to be totally self sufficeint on this, should have tapped the lines going into the Atlantic to build their infrastructure and they could have for far less than building a whole new one on their own. I think it shows a bit of short-citednesd by their CFO.

       

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      Anonymous Coward, Dec 12th, 2012 @ 12:55pm

      Re:

      http://www.theverge.com/2012/12/12/3759000/eric-schmidt-google-fiber-real-business

      I guess in that case we should expect an apology from you for being wrong, because they do plan on expanding (per the article). Although I don't expect one.

       

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        Wally (profile), Dec 12th, 2012 @ 1:19pm

        Re: Re:

        "And, while Google shied away from its initial promise to have its network open for other services to compete,"

        Nope, appologies are still mine to accept. I don't expect you to have either read the article (citing the quote above), nor did I expect you to even take the time to mill around through previous comments I've made on the matter in other articles. They are snubbing competition like Nintendo, and almost like Sega did with their customers, the general public suffers. Why? They didn't feed off the base infrastructures in place because their conpetitors use thoseFiOs lines.

         

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    Anonymous Coward, Dec 12th, 2012 @ 1:06pm

    First off, it could take a decade until Google or anyone else really can offer it "everywhere", which is what this calculation assumes - that they will instantly make it available in all places of US.

    Second, they can offer it in cities first, where they will get much higher return on their investment, and they can just use the money to continue expanding in other cities. It's not like Google needs $140 billion right now to fund this.

    By the time they have to move to rural areas, they will get enough money incoming from all the customers in all the cities. So this is very doable.

    Also, the Government can help, too. After all they already spent $200 billion to get the ISP's to bring Americans fiber - and they didn't - but still wasted the money.

    http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html

     

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      Wally (profile), Dec 12th, 2012 @ 1:21pm

      Re:

      We could have used that bailout money the Feds paid to bank CEO's with their $500 million bonuses....The government cannot afford it. It needs to be a joint venture.

       

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    Casey, Dec 12th, 2012 @ 1:38pm

    Just.... no.

    Anyone who believes $140 billion could cover the entire US with fiber is an idiot. Reaching the 10% most rural would cost more than that alone. Goldman Sachs is the one who crunched these numbers, so it should be no surprise. If you are not in a big city, you are not on their radar.

    Friendly customer service? What customer service? You mean a webpage? You don't really think they are offering good customer support for the prices they charge?

     

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    Suzanne Lainson (profile), Dec 12th, 2012 @ 1:48pm

    But what about mobile?

    Seems like lots of people are saying that companies tied to web browsers are out of date and that the entire world is shifting to mobile.

    If the action is mobile, does any company want to sink a lot of money into wiring houses?

     

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      Ed C., Dec 12th, 2012 @ 2:52pm

      Re: But what about mobile?

      You can't stream HD video over wireless. And if you could, you'd probably blow you're entire monthly limit on a single movie. The same goes for games and the sometimes ridiculously large patches too, or anything that requires large downloads.

       

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        Suzanne Lainson (profile), Dec 12th, 2012 @ 3:07pm

        Re: Re: But what about mobile?

        You can't stream HD video over wireless. And if you could, you'd probably blow you're entire monthly limit on a single movie. The same goes for games and the sometimes ridiculously large patches too, or anything that requires large downloads.

        That's the case now. But if you are investing billions into a hardware solution, you might want to be looking pretty far down the road. If you think much of the online world is shifting to mobile, you might want to avoid sinking lots of money into a system which becomes outdated. In developing countries, they aren't wiring homes, so if they start dictating what goes online to accommodate their systems, you may find that the world of content shifts to a wireless world.

         

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    Suzanne Lainson (profile), Dec 12th, 2012 @ 5:51pm

    If I were a cable operator, I'd let Google have whatever market it wanted

    I'm not sure the economics justify putting a lot of money into rewiring everything.

    So if Google wanted to come into a town and my company was already there, I'd probably drop the price on the broadband my company already had in place and let Google rewire for faster speeds.

    I don't think there are a lot of companies dying to get into this business or even wanting to hang on to this business if there's a lot of upfront investment that they have to pay for.

     

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    B's Opinion Only (profile), Dec 12th, 2012 @ 8:05pm

    Just use the cellphone business model!

    As Anonymous Coward mentioned above, the numbers people are throwing around work out to about $1500 per household for a fibre install. That's what most of us pay for TWO years of crappy/capped/slow Internet service, not to mention that fibre can handle our TV and phone as well.

    If the telcos can convince us to take a "free" iPhone by agreeing to a THREE year contract, why can't fibre work the same way???

    I would gladly pay $100 per month or more for fast, high-bandwidth fibre! And (for the first time in my life) I would happily pay a set-up fee to get that precious light pipe into my home.

    The incumbent telcos won't acknowledge this reality until people catch on that they are being gouged, and that speed and bandwidth are basically free once the infrastructure is in place. Remember when you paid $75 per month for a pager that could only beep when you had a message? Remember paying $$ a minute for cell phone service?

    Telcos will price the ones and zeroes as high as they can until someone like Google comes along and shows everyone that bandwidth is a commodity just like electricity, gas and water. Have you ever thought about your monthly water bill when 'downloading' a glass of water? Has your tap ever slowed to a trickle because your neighbor was washing clothes? Has the water co ever 'fined' you by quadrupling your monthly bill because you watered your lawn too much?

    Bandwidth is the new water. The infrastructure for both is similar in logistics and cost. Water treatment plants, buried pipes, maintenance, quality control, repairs, billing - how are the ones and zeroes flowing into your home any different?

     

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      Suzanne Lainson (profile), Dec 12th, 2012 @ 8:20pm

      Re: Just use the cellphone business model!

      Telcos will price the ones and zeroes as high as they can until someone like Google comes along and shows everyone that bandwidth is a commodity just like electricity, gas and water.

      And I think they will let Google do it if Google wants to.

       

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    Anonymous Coward, Dec 12th, 2012 @ 9:13pm

    I'm just happy to hear that Google is treating it like a real business opportunity now and not just an experiment to show what is possible with super high speed internet service.

    I waited years to go from 28k dialup to 1.5mbps DSL,I can wait a few years to go from 50mbps cable to 1gbps+ fiber...its just nice to to know (fingers crossed) someone is finally getting the ball rolling that's not in bed with Comcast and going to stall their roll-out because of backroom deals (Verizon).

     

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