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Isn't the more obvious conclusion that Google Fiber is just a bargaining chip for Google to use against traditional ISPs and cell phone networks? It won't even

by gamble 14y ago

Isn't the more obvious conclusion that Google Fiber is just a bargaining chip for Google to use against traditional ISPs and cell phone networks? It won't even serve all of Kansas City for the foreseeable future, much less the rest of the country. What it does do is demonstrate that Google has the will to play the carriers' game, without actually committing the capital necessary to build out a competitive network. Remember how gung-ho Google was about network neutrality, before it became necessary to choose between net neutrality and Verizon's support with Android. I find it hard to believe that Google's shareholders would appreciate the company devoting the massive amounts of capital necessary to build out a fiber network across the US, unless it was an existential question. And even then it will only be built out to the degree necessary to punish the carriers.

throwaway64 14y ago
Google already has a massive nationwide network to serve as a CDN for stuff like youtube. They are peered with every ISP of any significant size, and have data centers and points of presence in every major city. Not to mention they have bought up almost all the "dark fiber" they could get their hands on for the last 10 years. Their network already exists, and its everywhere, the only thing remaining is rolling it out to residential areas. There is a large upfront free that customers have to pay for the installation. If the economics have been worked out correctly by Google, the customers themselves will pay almost all of the roll out costs. Edit: I should clarify, a large upfront fee, or a reasonably large monthly fee.
- gamble 14y ago
  What fee? The only requirements are a 2-year contract, or a $300 upfront fee for the free option. And they give you a free Nexus 7 tablet with the contract. At $70-120/month, the money they're collecting on a 2-year contract isn't remotely enough to cover construction of the network and the end-user electronics.
  - throwaway64 14y ago
    $120 a month for 2 years is $2880 guaranteed, not to mention it is unlikely customers will leave considering the competition comes nowhere even close to that kind of offer. Some of that will be eaten up by fixed costs of providing the service (for stuff like bandwidth, Google can probably get better prices than almost anyone else in the world, due to extensive peering), and for the provided electronics (which Google can order in huge quantities and pay comparatively little for, or even build themselves, like they do with their own internal servers and networking equipment). Whats left over is still a very large chunk of change, especially when you consider the fact that Google wont roll out fiber till a decent percentage of a neighborhood is willing to sign on (their calculated numbers are almost certainly designed to cover roll out costs) I think this will easily pay for their roll out costs. Remember, they don't need to build out a national network to serve tons of places, they already have one. YouTube itself already uses something like 40% of the internet traffic to residential connections. The important thing to consider here, is as far as Google is concerned, they only need to break even, they arn't in the same game the other ISPs are where it is their only profit center.
  - dedward 14y ago
    One would imagine they were thinking long term and big - they didn't start laying the foundations for this 10 years ago for no reason.... and while they may have toyed with some "lab" projects that never took off... this one represents a hell of an investment - they're probably several moves ahead of everyone else already. Now imagine what they have up their sleeve that they aren't telling anyone about.
wmf 14y ago
I think it's been demonstrated that the "bargaining chip" theory does not work very well; incumbent ISPs only increase service/reduce prices in cities where a competitor appears. But by the time Google Fiber is in a city, Google has already spent a lot of money. Maybe Google could perform some kind of franchise judo where they have the smallest possible buildout in each city, forcing incumbents to respond disproportionately...

by gamble 14y ago

throwaway64 14y ago

Google already has a massive nationwide network to serve as a CDN for stuff like youtube. They are peered with every ISP of any significant size, and have data centers and points of presence in every major city. Not to mention they have bought up almost all the "dark fiber" they could get their hands on for the last 10 years. Their network already exists, and its everywhere, the only thing remaining is rolling it out to residential areas. There is a large upfront free that customers have to pay for the installation. If the economics have been worked out correctly by Google, the customers themselves will pay almost all of the roll out costs. Edit: I should clarify, a large upfront fee, or a reasonably large monthly fee.

gamble 14y ago
What fee? The only requirements are a 2-year contract, or a $300 upfront fee for the free option. And they give you a free Nexus 7 tablet with the contract. At $70-120/month, the money they're collecting on a 2-year contract isn't remotely enough to cover construction of the network and the end-user electronics.
- throwaway64 14y ago
  $120 a month for 2 years is $2880 guaranteed, not to mention it is unlikely customers will leave considering the competition comes nowhere even close to that kind of offer. Some of that will be eaten up by fixed costs of providing the service (for stuff like bandwidth, Google can probably get better prices than almost anyone else in the world, due to extensive peering), and for the provided electronics (which Google can order in huge quantities and pay comparatively little for, or even build themselves, like they do with their own internal servers and networking equipment). Whats left over is still a very large chunk of change, especially when you consider the fact that Google wont roll out fiber till a decent percentage of a neighborhood is willing to sign on (their calculated numbers are almost certainly designed to cover roll out costs) I think this will easily pay for their roll out costs. Remember, they don't need to build out a national network to serve tons of places, they already have one. YouTube itself already uses something like 40% of the internet traffic to residential connections. The important thing to consider here, is as far as Google is concerned, they only need to break even, they arn't in the same game the other ISPs are where it is their only profit center.
- dedward 14y ago
  One would imagine they were thinking long term and big - they didn't start laying the foundations for this 10 years ago for no reason.... and while they may have toyed with some "lab" projects that never took off... this one represents a hell of an investment - they're probably several moves ahead of everyone else already. Now imagine what they have up their sleeve that they aren't telling anyone about.

wmf 14y ago

I think it's been demonstrated that the "bargaining chip" theory does not work very well; incumbent ISPs only increase service/reduce prices in cities where a competitor appears. But by the time Google Fiber is in a city, Google has already spent a lot of money. Maybe Google could perform some kind of franchise judo where they have the smallest possible buildout in each city, forcing incumbents to respond disproportionately...