Tag Archives: google

The Slow Death of Google Fiber? CEO out, expansion halted, employees fired

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Google_fiber_logoI’ve long maintained that Google isn’t in the ISP business for the long haul. I said over four years ago that the odds of your city seeing it were astronomically low. Well, now Google is basically saying the same thing. The CEO announced that they have halted expansion of the network, let go employees in towns where they haven’t build, oh yeah, and he’s leaving for “other opportunities”, maybe they should have counted with synel professionals to reorganize. I’ve had multiple first-hand reports of users in Provo who have been unable to get signed up for unspecified reasons, even after Google said they were coming. So what happened?

Google simply bit off more than they could chew. Investors do not like Google pouring money into something this capital-intensive with an ROI so far out. In every market they have attempted to deploy in, they are hit with constant roadblocks from incumbents, something any sane person with industry knowledge could have foreseen from miles away. The lack of voice and 100Mbps products lead to lower than expected adoption and even the loss of customers in Provo, something that I (among others) warned about immediately. Google eventually added these, but it seems to be too little, too late.

Google’s original promise was to form public-private partnerships with cities. Once they launched in Kansas city, it became clear that the “partnership” was reduced to operating like a standard duopolist while using brand power to extract all kinds of benefits from the city. The same thing happened in Provo when the city took a multi-million dollar bath on a network that was around break even on operating expenses and debt service. The model was “give us everything we ask for because we’re famous and fabulous”. The obvious cherry-picking and red-lining was swept under the rug with promises of “eventual” universal rollout, something that now looks increasingly unlikely.

I don’t mean this to just be a smug “I told you so” post (though I would be lying like Donald Trump if I said I wasn’t taking at least a little glee in having been right for so long as the haters yelled at me). It’s to point out that real broadband improvement starts at home. It means you, your community, your city all working together to improve the outcomes. Google was about as close as I’ve ever seen to a large scale broadband Santa Claus and it appears poised to pratfall on the stage.

My take is that we’re seeing the slow decline of Google Fiber. Cities who have it now should be working on their contingency plans for if (or, more likely, when) Google decides to pull the plug. Cities who were hoping for it (including both those who were and were not in talks with Google) need to move on to a new plan. It could be a true public-private partnership, a full-on municipal network (UTOPIA will still be happy to have you), or a privately-funded user-owner cooperative. What won’t work, be it Google or Comcast or CenturyLink, is hoping that you can just wait your way into better broadband.

Is Google Fiber playing copyright cop?

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Google_fiber_logoI’m constantly amused when people project their ideal of an ISP onto Google. After abandoning open access, shutting up on net neutrality, and gorging themselves on handouts, you’d think we’d all be a little bit wiser about how this company operates. It comes as no surprise, then, that Google is apparently also dipping its toe into the copyright cop waters. This is also affecting users in Provo as shown in the below anonymized email:

From: <no-reply@google.com>
Date: Tue, Sep 23, 2014 at 10:11 AM
Subject: FWD: <redacted> Notice of Claimed Infringement from <redacted> at <redacted> – Ref. <redacted>
To: <redacted>

Google Fiber has been notified by a copyright owner or its authorized representative that your Google Fiber service has allegedly been used to access or download infringing copyrighted material. The notice that we received, identifying the copyrighted material, can be found attached to this email.

We have not shared any information about you with the complaining party, nor will we unless we receive a subpoena or are otherwise required by law to do so.

Please be aware, however, that our Terms of Service forbid the use of your Google Fiber account for unlawful activities, including copyright infringement. Repeated violations of our Terms of Service may result in remedial action being taken against your Google Fiber account, up to and including possible termination of your service. If you believe that people outside your household may have had access to your Google Fiber service (such as via an open wireless access point) and are responsible for this activity, you may want to take steps to secure your network.

If you have legal questions about this notification, you should consult with your own legal counsel. If you have any other questions about this notification, please contact the party that sent the attached notice.

So far as I know, UTOPIA providers do not enforce these kinds of terms. XMission in particular has a history of telling anyone without a court order to pound sand.

The most concerning part of these notifications is that they are generated by a private party that has no accountability for its accusations. Google may also not do any kind of investigation to test the veracity (see what I did there?) of the claims being brought to them. It’s entirely possible they’ll take the complaints at face value and, if you get enough, disconnect service without so much as a “how do you do”.

How’s that “don’t be evil” thing working out for you, Provo?

Google Fiber will leave the duopoly intact and only change the players

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Google_fiber_logoThere’s a lot of talk about Google Fiber bringing competition to the marketplace, but I think it’s a lot of smoke and mirrors. In reality, Google is very good at leveraging its brand to cover up many plays it’s pulling straight out of the incumbent playbook. In the end, they’re acting a lot more like Comcast than I think many are comfortable with confronting, much less admitting. I’ll make a bold prediction: Google will be the new Comcast within 5 years. I’ll make the case as to why.

The biggest problem I see with Google Fiber is their practice of redlining and cherry-picking. Their pattern so far has been to break up neighborhoods into very small “fiberhoods” and only build if there is sufficient demand. Given that they ask for either a 2-year contract at $70/mo or $300 to install the service, it’s easy to see how low-income neighborhoods are unlikely to reap the benefits of a new vertical monopoly in town. This is the kind of practice that Comcast and CenturyLink has been dying to get into: upgrading only the most lucrative areas and letting the low-margin subsidized lines languish.

Let’s not also forget that you have a very limited time to sign up or be left behind. Google has made it very clear in their FAQs that it has no plans to reopen to new subscribers once the signup period has closed. In a rental-heavy market like Provo, this could exclude a large proportion of the user base from ever getting service. There’s also no mention on if someone can reactivate a terminated line to get service again.

So why is Google doing this? Based on the company’s history, I think it’s all about costs. Google is famous for designing hardware to meet very specific needs, a process that leads them to be extremely efficient. It’s not much of a stretch to think this same efficiency is being applied to building Google Fiber. (Warning: speculation ahead.) My theory is that they’re building the network exactly to capacity in an effort to reduce costs and maximize ROI. If you don’t have to plan for potential future additions or build the network where demand won’t meet certain profit goals, you can slash your cost per subscriber to under $1K. Assuming they make about $35 per subscriber per month in profit (which is consistent with numbers I’ve heard from UTOPIA service providers), that works out to a payback of under 2.5 years. With a 5-7 year contract, it’s not hard to see how Google is going to make money hand over fist.

This makes it all the more curious, then, as to why they need all sorts of concessions from municipal governments to make it happen. While their official checklist for the latest round of cities claims that no subsidies are expected, it’s hard to see how really going to be the case. Kansas City greased the wheels with millions in tax dollars whereas Provo literally gave away the network to get Google’s attention. This is much like CenturyLink’s hypocrisy in decrying municipal systems as unfair competition while available themselves again and again and again of available tax dollars. Google may say that they don’t want subsidies, but the unspoken understanding is that without significant municipal concessions, they’re probably going to pass you over.

With all of these behaviors that remind us of the many ways in which Google is behaving like an incumbent carrier, it doesn’t take much to connect the dots. CenturyLink is probably going to let residential wireline rot on the vine as it pursues high-margin business services. Comcast will quickly hit the end of its upgrade capacity and focus instead on entrenching its vertical monopoly between content production and distribution, replacing CenturyLink as the “cheap” provider. Google is then free to fill the void left by Comcast as the “fast” provider, and we’re right back in the non-competitive state we had before, just with different names on the door.

To be quite frank, I don’t think Google has the capacity to be a good ISP. Google has a history of very technocratic decisions, depending heavily on the technical specs, prowess of their products, and brand name to compensate for their lack of customer service and direct marketing. This is uncharted territory for them, especially since they haven’t proven to be very adroit at dealing with entrenched companies whose lobbyists have very deep government connections. While I’m willing to be proven wrong, I don’t think they’re really prepared to survive in the regulation- and politics-heavy world of telecom, especially when the margins are relatively low. Once the reality of operating a utility settles in, you have to wonder if Google is going to treat their fiber products like they did their WiFi network in Mountain View.

When cities are considering Google’s proposal, they need to look at it with clear vision. There’s a limited amount of skin they have to put in the game, but they’re also not getting the same level of benefits that they could be. Overall, Google is offering to rearrange the deck chairs, not right the telecom ship. I hope that more cities will be wise to it.

Not Just Copper: Is CenturyLink slowly withdrawing from the residential wireline market entirely?

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CenturyLinkAlmost all of our broadband heartburn comes from uncompetitive markets. Even in areas with at least two wireline competitors (which is only about 95% of the urbanized Wasatch Front), you’re usually stuck picking between faster speeds from Comcast and cheaper speeds from CenturyLink. I’ve already written that it’s looking like CenturyLink is going to let copper die without a replacement, but it’s entirely possible they just want to get out of the residential market entirely. This would be a nightmare for competitive choice in our state.

Do you remember the last time CenturyLink upgraded their ADSL2+ product? I do; it was 2009. The year before, they stopped doing FTTN deployments entirely, occasionally lighting a new FTTN node here or there. Most of the Wasatch Front is still limited to 7Mbps ADSL with real-world performance usually coming in much less than that. I know people in Sandy that struggle to squeeze 3Mbps out of that aging copper. It makes CenturyLink’s claims of doing their own gigabit fiber seem pretty hollow and underscores that their main purpose in deploying FTTN may have been to try clubbing competitors in the kneecaps.

Just look at how CenturyLink has been not responding to competitive threats. In Provo, Comcast very quickly pushed their system to its absolute limits with a 250Mbps/50Mbps tier that price-matches Google. What did CenturyLink do? Nothing. They haven’t uttered a single word about doing any kind of upgrades in Provo at all. Who can blame them? It would cost them tens of millions of dollars to go after a customer base that hates them. The ROI would be so far out as to be disastrous. It’s noteworthy that the only places CenturyLink has announced doing FTTH have been duopoly markets, places with a more-or-less captive customer base. Given their non-response to Veracity rolling their own ADSL2+ using CenturyLink cabinets, this isn’t too surprising.

At the same time, CenturyLink has been chasing down deals to build fiber to cell towers and focusing heavily on their business services through acquisitions like Savvis. These premium services command much greater profit margins and more stable user bases than residential markets, plus they can easily convince businesses to pay the full cost of installing the latest technology. Even when the fiber to cell towers goes into residential areas, CenturyLink has been noncommittal about using it to upgrade DSL users to better speeds or technologies. It seems very strange to not want to use the investment to upgrade other services. I’d usually say they just don’t have the money, but they just approved spending $1B on a stock buyback program, money that would deploy gigabit fiber to as many as 1M homes and businesses.

This all paints a very disturbing picture for the future of telecommunications where open access systems like UTOPIA aren’t or won’t be available: Comcast will be the only real ISP for most users, and cities who go with Google Fiber will be right back into the “fast vs cheap” duopoly they hate so much right now. This is one of the many reasons why I’ve been so sour on both Provo and Salt Lake City for going with Google instead of fixing the underlying anticompetitive problems in the telecommunications space. Why would you expect Google to be any better than Comcast when they no longer really have to work for your business?

Is Google Sweet on UTOPIA?

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The Salt Lake Tribune reports today that Google had a few UTOPIA executives come out to their offices last month to discuss how UTOPIA operates. The article insinuates that this may mean that UTOPIA is near the top of the heap in Google’s search for a location to build a fiber-optic network. As tantalizing as that possibility is, I don’t think there’s evidence enough to support it.

Google would obviously be interested in how UTOPIA operates regardless of if they are a finalist. UTOPIA’s model is very, very close to what Google wants to do and it is in their best interests to learn what does and doesn’t work on an open-access wholesale fiber-to-the-premises network. I think UTOPIA would be an excellent partner for Google, but nobody yet knows if Google is interested in expanding an existing project (or one already in progress) or taking the steps to create one from scratch using the best practices of what’s already been tried. That alone could make or break any potential deal between the two parties.

Google may also not want to step into such a partnership because of the complexities of determining who owns what. While I believe them to be an honorable company that tries to do the right thing more often than not (despite, on occasion, stepping in it), they are likely going to want some interest in whatever the finished product may be and potentially a controlling one. Cities that have already sunk a bunch of time, energy, and money into it may not be so willing to let go of the reins.

I know there is a lot of excitement about a company of Google’s stature dropping a fat wad of cash on crazy-fast pipes, but we should try tempering that with a realistic perspective. It’s simply too soon to tell who Google will choose to work with.

BREAKING: Gov. Herbert Supports a Google Partnership with UTOPIA

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In what is another positive piece of news for UTOPIA, Utah Governor Gary Herbert issued a letter today urging Google to partner with UTOPIA. In his remarks, he referred to UTOPIA as “a good candidate to partner with Google” and praised both “successfully pursued models of deployment” and their “sustainable and reliable model” which has made Utah “well-prepped ground”. This kind of unabashed support and endorsement will carry weight in state political circles and hopefully give Utah another point in the plus column as Google evaluates applications.

Haven’t given Google your pitch yet? Go do it now before the March 26 deadline.

UTOPIA Announces That They Will Pursue Google Fiber RFI

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Today on the steps of city hall in West Valley City, UTOPIA announced their intention to pursue an RFI with Google on their ambitious fiber-to-the-home project. Mayors of several of the cities spoke strongly in favor of the idea and provided examples of how UTOPIA fiber is already enriching their cities. Several also pointed out that Google plans to use a model almost exactly like UTOPIA which validates their plan.

Several private companies, including Thomas Arts, spoke strongly in favor of UTOPIA and the value it provided for their growing businesses. It was also announced that Connected Lyfe has joined the network as a new service provider, though it’s not entirely clear as to what services they plan to offer.

Google Fiber in Utah: Contact Your Elected Officials

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A critical component of convincing Google that their fiber optic build should be located in the Beehive State is participation not just from you and me, but also from elected officials. While it will be obvious that you should contact your city council members and mayor, have you also considered contacting your state legislators? Here’s what I wrote to Sen. Niederhauser and Rep. Beck:

Greetings Sen. Niederhauser and Rep. Beck;

As you may have heard, Google has offered to build a fiber optic network similar to UTOPIA designed to reach from 50,000 to 500,000 households. They are currently accepting proposals from municipalities and individuals in order to determine where they should build. The website with additional information and links to the applications is available here: http://www.google.com/appserve/fiberrfi/

It would be absolutely incredible if Google decided to come to Utah to partner with or compliment UTOPIA’s efforts to improve our state’s critical telecommunications infrastructure. It would bring significant investment into the state and thousands of new jobs. I know you both likely have your hands full during this legislative session, but it would be very helpful if either or both of you would sponsor a resolution in favor of Google’s participation in our state and/or pass this along to the appropriate agencies within the executive branch. Google is only accepting proposals and nominations through March 26, so time is of the essence.

Thank you for your time and consideration. If you have questions about telecommunications or what Google is doing, please feel free to call or e-mail me.

While legislators are very busy people, especially as they consider how to balance the state budget, it can’t hurt to sent a short and concise e-mail urging them to adopt and pass such a simple resolution. If you don’t know who your legislators are, you can find out from the Utah Legislature website. You can also consider contacting your county government officials as well; the more support, the better!

Google Wants to Build Muni Fiber; Tell Them to Build it Here

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Google pretty much send the entire telecom world spinning by announcing today that it would like to build a 1Gbps fiber network to cover a footprint of between 50,000 and 500,000. More significantly, Google is requiring that the project be an open wholesale network with heavy municipal involvement. In fact, the Mountain View company has validated municipal open wholesale fiber optic networks as the preferred network of choice in the 21st Century, a fact I’m sure will not be lost on critics of such projects. (Yes, UTA, I’m telling you to grab a big, hot slice of humble pie and chow down.) Through March 26, Google will be accepting proposals and nominations from municipalities and interested residents for where they should build this network. This is your chance to get fiber in Utah for absolutely nothing courtesy of one of the largest tech companies in the world.

And really, we’re a perfect fit. Or, more precisely, UTOPIA is a perfect fit. It’s a municipal fiber project. It’s an open network. There’s already nine providers offering services right now. The backbone and NOC are done. The city has pole attachment rights and franchise agreements already in place. There’s middle-mile fiber all over the place. And, should the footprint be completed, it’s well within the size requirement that Google is looking for. UTOPIA is a shovel-ready project that could complete the build of the network within a year of Google getting involved while providing a significantly lower cost per home than many other communities. That’s a lot of bang for your buck.

Now this is the part where you come in. Google wants you, each of you, to nominate your community for this project. This is one of those cases where the prize is so great that nobody (and I mean nobody) who wants 1Gbps Internet access in their home can afford to not at least fire off a quick submission. Every one of you needs to do it. Your city needs to do it. Every one of your friends needs to do it, their friends need to do it, your family, your ward/congregation members, your neighbors, even that guy down the street that you don’t like because he doesn’t mow his lawn as often as he should. Google needs to hear from thousands of Utahns that this is still the place.

I’m asking each of you reading to right now make a personal commitment to tell at least 10 people you know to submit a nomination via Google’s fiber website and follow-up to make sure it gets done. Get each of them to commit to asking 10 more people to do the same. If all 175 FeedBurner subscribers do this, Google will have over 17,000 nominations from Utahns via this website alone. If all 1,000 unique visitors to this site do it between now and the deadline of March 26, they will have over 100,000 comments. Do you see the power of the snowball effect here?

Google CEO Eric Schmidt said during his visit to the Utah Technology Council last October that we don’t retain technology companies we start because we lack high-speed broadband. Let’s take him and his company up on their generous offer to show them what we’re made of. Get it done and get it done right now.