Telco Analyst Compares Google Fiber To Ebola… Completely Misses The Point

from the making-duopolists-sweat dept

As we’ve noted more than a few times, the broadband industry was in dire need of a swift kick in the posterior, and Google Fiber has done a wonderful job highlighting this fact on a daily basis. The company’s decision to jump into the broadband market and offer symmetrical 1 Gbps connections for $70 a month (with no obnoxious fees) quickly resulted in thousands of cities all over the country falling over themselves to get Google’s attention. In the process, Google was able to not only highlight the overall lack of broadband competition, but also other notably less-sexy (and therefore overlooked) issues like state protectionist community broadband bans. The free marketing in every paper nationwide is of course just an added perk for Google.

Of course, not everybody’s so easily impressed. Telecom industry analyst Craig Moffett, who has made a name for himself being rather wrong about things (whether that’s predicting the collapse of the wireless industry or pretending cord cutters don’t exist), this week poured cold water on Google’s efforts by highlighting just how few subscribers Google actually has. In a research note, Moffett notes that Google Fiber has just 30,000 subscribers, and this is somehow proof positive that Google Fiber isn’t a big deal. Like, you know….Ebola:

“To Cable & Satellite investors, Google Fiber is a bit like ebola: very scary and something to be taken seriously,” telecom industry analyst Craig Moffett wrote in a research note to investors this week. “But the numbers are very small, it gets more press attention than it deserves, and it ultimately doesn’t pose much of a risk (here in the US at least).”

The unfortunate tasteless use of a bad metaphor aside, Moffett’s not really seeing the big picture when it comes to Google Fiber’s impact. As we’ve noted previously, Google Fiber isn’t just about deploying faster, cheaper broadband connections (though Google has made it clear it wants a sustainable business). Google Fiber’s been largely about highlighting a lack of competition and lighting a fire under all-too-comfortable duopolists. As the project has expanded, Google has made a point of offering cities a checklist (pdf) helping to make deployment easier, whether it’s Google or somebody else doing the building.

Moffett looked to the U.S. Copyright Office to get the total subscriber counts (it tracks video subscribers because of compulsory license fee requirements). It’s worth noting however that the USCO doesn’t track broadband subscriber totals, and most Google Fiber customers are likely to be skipping traditional video and embracing over-the-top video services, so the actual numbers are likely higher. It’s also worth noting that Google’s on the cusp of a major new expansion into Raleigh/Durham, Charlotte, Atlanta, and Nashville, with potential Portland, Phoenix, Salt Lake City, San Antonio and San Jose launch announcements later this year. It’s a slow drum beat, but it’s a steady one.

In other words, while it’s true Google Fiber has probably seen some overhype and most incumbent ISPs don’t face an immediate competitive threat, looking at subscriber totals and declaring it a non-starter for the telecom industry is pretty narrow thinking. Google Fiber not only shines a spotlight on the lack of meaningful broadband competition, it has sparked the public’s imagination and fueled a national conversation about how we can do broadband better.

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Comments on “Telco Analyst Compares Google Fiber To Ebola… Completely Misses The Point”

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Mason Wheeler (profile) says:

The one thing that has me worried about Google Fiber is Google’s recent display of yet another example of its shifting attitudes towards engineering. My brother lives in Provo, Utah and he’s on Google Fiber. He says it’s great, an amazing Internet service, the kind of thing everyone should have.

But what’s gonna happen to him if/when Google loses interest in it?

Karl Bode (profile) says:

Re: Re:

That’s what I worry about. I think Google eventually sees a management shift and somebody decides to sell this effort on the cheap. Until then though, the pressure it’s placing on ISPs is great, and hopefully Google would sell it to somebody with similar goals.

Still, they’re at least educating cities on how to get out of their own way, even if the end result isn’t exactly curing the digital divide.

Anonymous Coward says:

Re: Re: Re:

If Google were ever bought out by a traditional American profiteer (and not even a corporate-raider type like Carl Icahn) or hedge fund or whetever, I suspect that they will start employing the usual accounting formulas, such as requiring all divisions (even the lunch counters) to be profitable, and of course emphasizing short-term profits above all else (basically running the company into the ground).

It seems that very public company will inevitably go that route at some point, which typically puts it near the end of its lifespan when it starts getting bought and sold every few years and money (and its reputation) squeezed out of it each time, until there’s nothing left to squeeze. Hopefully companies like Google are still a long way from that point in their lifespans, but you never know.

JP Jones (profile) says:

Re: Re: Re: Re:

This needs to be repeated more often. Complete focus on short-term profits has destroyed the world economy. We really need to get out of this “slash-and-burn” mindset where we milk every company for maximum profit until they collapse, then move on to the next. While doing so makes a few people rich, most people are just losing out and the economy as a whole suffers.

I don’t really see this happening with Google any time soon but I suppose anything is possible.

PaulT (profile) says:

Re: Re:

I’d say that the hardware infrastructure required here is going to make this more of a long-term project than the average Google software project. If they lose interest, it won’t cause that infrastructure to magically disappear, and they won’t simply throw it away. Whoever buys it will have the capacity to do what Google are doing with it before they lose it.

Also, Google don’t throw things away on a whim (although it might seem like that sometimes). Using Code as an example – they set that up as a way to shake up development at a time when there were limited options. By the time it shuts down, it will have run for a full decade and is now inferior to competitors that even Google themselves have chosen to use instead of their own platform.

If that’s the fate of the Fiber project (put down long after it’s been surpassed by other choices), then the project will have done its job.

Mason Wheeler (profile) says:

Re: Re: Re:

As a developer, I don’t see it that way. What Google is saying, sadly, doesn’t match observed facts all that well. Their annointed successor, Github, is a mess and a half.

Trivial (on Google Code) tasks such as viewing the commit history of a project or a file don’t appear to even exist anywhere in the Github interface. (Yes, I know there exists a way to do it, but it’s not discoverable.) Navigating to the front page of the project takes you to the root of the repository hierarchy, instead of something reasonable such as, oh, I dunno, a front page for the project maybe? They claim to have SVN support, but it crashes and burns horribly whenever you try to do trivial things like add an ignore from TortoiseSVN or switch from one branch to another. And so on. Google saying GitHub is “a better system” is a bad joke, from the perspective of someone who’s used both.

No, this really does feel like they got bored with the project and now they’re abandoning it, and if some of the users end up getting screwed over, oh well. And it’s not the first time they’ve done this. So why should we think it will be the last?

PaulT (profile) says:

Re: Re: Re: Re:

“Google saying GitHub is “a better system” is a bad joke, from the perspective of someone who’s used both.”

Well, I’m not really a developer and have only dabbled in both so I’ll take your word for it. But, unless I’m reading the situation wrong, the loss of users happened before they decided to shut it down, while GitHub has gone from strength to strength. There must have been some reason for that.

As for the examples you linked, they mostly prove the point. Many of them were niche or minor products that shut down because hardly anyone was using them or shut down because they were superseded by something else by them or a competitor/buyout (e.g. Google Video vs. YouTube).

Because of the size of Google, there’s always going to be a core of users who loved the project before it was cancelled and bemoan the cancellation. Because of the way Google works, a lot more of these projects see the light of day before they’re sure of what they’re doing with it long term. But, they’re not going to keep projects going indefinitely because there’s a few thousand hardcore users around losing them money. I’m sympathetic to those who have grown to love them, but let’s face it – you’re usually not paying for those services.

I personally doubt that Google will treat this project the same way due to the external infrastructure they’ve invested in compared to the internal infrastructure on a software platform they can reuse and re-purpose. On top of that, (most) people are actually paying for the service so it’s a different proposition than trying to monetise something like Wave that nobody really seems to understand how to use.

“So why should we think it will be the last?”

There’s no guarantees. Google will ultimately determine the fate of their products based on what’s best for Google, as does any successful company. I’d maintain they’re more likely to sell Fiber off than simply shut it down if they do decide to dispose of it, but nobody can tell the future.

If you distrust them that much, don’t use them. You can’t be caught out if you’re not using their product in the first place. If the stated aim of shaking up the broadband market works, you’ll reap the benefits anyway.

Chronno S. Trigger (profile) says:

Re: Re:

Google’s fiber rollout strikes me more like Youtube than, say, Google Reader. They went into it with the idea of making money not as simply a loss leader to get more eyeballs on adsense. I’d be confident enough that I’d switch instantly if they ever rolled out where I live.

Worst case, Google Fiber goes belly up and I switch back to Verizon… Assuming they’re still in the broadband business. The way they’re acting suggests that they want the hell out.

Anonymous Coward says:

Did Google write all that twaddle for you?

Or were you allowed to gush on your own? I’d say you were expected to tone down their text so was less obviously a puff piece, but you just copy-pasted.

Being a “blogger”, writers at Techdirt don’t have any obligation to disclose their sources of income. That’s how to identify a journalist: bound by ethics to disclose their own interest.

Chronno S. Trigger (profile) says:

Re: Did Google write all that twaddle for you?

Assuming for a second (and this is a big assumption) that this was written by Google, it must still be a well written article since this is the best argument you could come up with against it. It just shows how right Google is in this situation when those apposed can’t even approach a valid argument.

jim says:

Re: Re: Did Google write all that twaddle for you?

Nope, but hope they don’t sell, damn good service. Had twcbefore google. And at+t before that. Ben using a small tablet and have two laptops, both with g communications. Now everything works, I can have the TV on, with the laptop and the tablet working at the same time, nothing has a wait, except for the latency, damn its cool. And I’m at the end of a neighborhood line. That’s even better. Visited u of k today. Long latency even in the hospital visiting..I can imagine the wait time on att or how the TV would pixelated when trying to download email. Or the hourglass was my favorite show on twc, my only bitch about google, no AMC, and in kc, the two is last years?ahhhhh!!

John Fenderson (profile) says:

Wrong mindset

Moffett looked to the U.S. Copyright Office to get the total subscriber counts (it tracks video subscribers because of compulsory license fee requirements).

The very fact that Moffett believes that video subscriber counts are a reasonable proxy for internet usage is rather telling, and I doubt that it’s unique to Moffett. It seems more likely that this is a common delusion in that industry. It explains a fair bit of the crazy talk that I hear from the cable companies, though: they’re describing a world that only exists in their minds.

It reminds me of the old saying that everyone seems crazy when you don’t understand their point of view.

jimb (profile) says:

come on Google Fiber, get here!

Speaking for myself personally, Google Fiber can’t get to my neighborhood fast enough (and it actually should, Santa Clara, CA is ‘on the list’ supposedly). My alternatives are AT&T or Comcast (see FCC?! There really -is- “competition” in broadband… not!). A Comcast not-nearly 1GB connection would be three or four times the cost Google is charging… clearly Google must be dumping, it couldn’t possibly a case of Comcast or AT&T overcharging. Look at that competition! The broadband internet industry in this country is shameful, and the way the big players have treated consumers is classically monopolistic/oligopolistic, they deserve everything the FCC will do to them and more.

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