8 ms·

This message is meant for exactly two groups: 1) Google, 2) other municipalities. AT&T is telling Google that they'll play in any market Google commits to and

by tc 13y ago

This message is meant for exactly two groups: 1) Google, 2) other municipalities. AT&T is telling Google that they'll play in any market Google commits to and drive the margins out of it. They want Google to stop doing this, and they're hoping to make Google question its financial model for this capital outlay. (I doubt it will faze Google.) AT&T is warning other municipalities to not cut Google any sweetheart deals that they're not willing to extend to AT&T. This is a potent message for municipalities that are sitting pretty on financial or other perks they've extracted from AT&T or other telecoms. AT&T is warning them the gravy train stops when they let in Google.

nlh 13y ago
Agreed. On your first point, I particularly agree that it won't faze Google. While I'm sure they want every business unit to be a money-maker, I don't think Google is worried about the margins getting squeezed. I bet they've figured the value of just having more people on an unmetered high speed connection and might even be willing to lose money on the access. And I'd be particularly surprised if AT&T has a bigger appetite for price wars than Google :)
- dclusin 13y ago
  I agree with this. If there was any money in the pipes we wouldn't see nearly as many mergers of broadband and content companies. We also wouldn't see content companies getting into broadband either. The nice thing about Google is that their interests as you said are mutually beneficial here. E.g. faster broadband means more money for Google via ad sales. This isn't true with Comcast or other carriers.
- mtgx 13y ago
  Yeah, if AT&T is trying to play some kind of "chicken game" with Google, they will lose, because Google doesn't care that much about the profits as they do about dramatically increasing the competition in the ISP market. In fact, higher valuer/buck is Google's goal in all of this. AT&T is falling right in Google's "trap", sort of speak (which is a good thing for us). While Google may indeed have some thoughts that with all this popularity and head-start they could become a major ISP in US, their primary and original goal was exactly to get other companies to start offering Gigabit and affordable fiber connections, with no other limits or caps.
  - shmerl 13y ago
    Does it mean Google will attempt to become a mobile provider as well? At least they could bring some sense into the market by providing a service with no caps.
    - commandar 13y ago
      I think it's pretty clear that Google isn't interested in being a telecom themselves, but have been making moves to try to push for the telecom industry to get their collective act together. They were instrumental, for example, in getting the FCC to force VZW to treat LTE service as a dumb pipe as a condition of the spectrum sale. And while much has been made of T-Mobile recently going contract-free, Google was pushing that with the original Nexus years ago, and I had a no-contract, un-subsidized G2 through T-Mobile in... 2010? Google already owns a ton of dark fiber, so it kind of makes sense for them to threaten the telecoms with competition to push things along. Building out a mobile network is a much bigger undertaking, so their pushes there have been -- and I suspect will continue to be -- a bit more behind the scenes in nature.
      - Retric 13y ago
        It's not just dumb pipes (ED: dark fiber) they also have YouTube which is ~15% of downstream traffic which they would be happy to stream inside there private network even with peering arrangements.
        commandar 13y ago
        I was referring to the sale of the 700MHz C Block LTE band. One of the conditions of the spectrum license was that VZW couldn't restrict what devices were allowed on the network and that they couldn't restrict what applications ran over the network. VZW got hit with a $1.25M fine by the FCC last year for blocking tethering apps on LTE. http://www.theverge.com/2012/7/31/3207193/verizon-fcc-tethering-700mhz-open-access-fine http://www.theverge.com/2012/7/31/3207193/verizon-fcc-tether...
    - dragonwriter 13y ago
shmerl 13y ago
Why, it's a clear message to the public as well, which states: AT&T is only ready to improve their service when threatened with competition. Otherwise forget it. At least one has to give them a credit that they had guts to admit it.
- aspensmonster 13y ago
  Yep. "This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures." So, they've had the capability for a while now. They just didn't see any reason to bother with the hassle of deploying a newer technology when they could just keep maintaining U-verse over twisted pair, even if capex stayed the same for either choice. Which is an interesting choice.
  - pokoleo 13y ago
    Interesting how the economic impact of this isn't discussed. They very well could've done this years ago, and given the economy a boost. By not doing this, they hold back the American economy. As a non-American, I can only imagine the class-action lawsuits...
    - commandar 13y ago
      Not only that, but the telcos were given massive federal subsidies which they were supposed to use to expand high speed internet connectivity and they never really followed through on their end of the deal. EDIT: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026...
  - deleted 13y ago
    [deleted]
  - jaggederest 13y ago
    To be fair, T's capex expenditures are massive, something like $5 billion per quarter or more. So to 'materially alter', it'd have to be like $3 billion a year or more.
namuol 13y ago
> AT&T is warning them the gravy train stops when they let in Google. The AT&T gravy train just gets replaced with the Google gravy hyper-rail.
joseph_cooney 13y ago
Theodore Vail would be proud.
mortdeus 13y ago
I think this is the kind of behavior Google wants from competitors. Ultimately companies like Google stand to make the most profit from an America with faster internet connections, and the slow overpriced connections are really making cloud related technologies like Google Drive lackluster.
thisisrobv 13y ago
Not sure if the message is that clear. If this were their stance they should have announced multiple cities today instead of piggy backing on the Google in Austin announcement.
brownbat 13y ago
Pretty delightful message for Google, actually. Google never dreamed of becoming a telecom monopolist. It just wants faster, cheaper internet for everyone. Google wants more people online, more people googling, more people clicking on ads. So AT&T's announcement? Exactly what Google wants. Well, this, or AT&T announcing it will sit on its hands while Google patiently erodes their subscriber base. Either one, really, is a win for Google. To use a chess analogy, AT&T (and friends) have been "forked."
- spikels 13y ago
  I think you are correct that Google wants everyone to have fast and high bandwidth internet connections as it benefits their core search advertising business. Google Fiber is just one of many efforts including Chrome/V8 and Spdy. However going head to head with AT&T in Austin will NOT help this effort. AT&T is signaling Google and, more importantly, other potential gigabit internet service providers that it will compete with you and thus reduce your margins in a very capital intensive (i.e. risky) business. Anybody considers something similar in another city will think again. Does anyone think the timing is a coincidence? If not why is AT&T doing this? I would speculate that AT&T cannot handle any more capital spending and the debt it would require. They can barely keep up with the spending on mobile and their landline business is dying. Internet service over their existing (i.e. paid for) infrastructure has got to be their best business (certainly on return on capital). Google Fibre does them no good.
  - dragonwriter 13y ago
    > However going head to head with AT&T in Austin will not help this effort. AT&T is signaling Google and, more importantly, other potential gigabit internet service providers that it will compete with you and thus reduce your margins in a very capital intensive (i.e. risky) business. Lots of firms with an established role in a market "signal" things like that when a competitor is heading to market with a new product ahead of them. Fewer of them follow through effectively.
    - spikels 13y ago
mikeash 13y ago
If this is a message to Google, then AT&T must be pretty stupid. It seems obvious that Google's goal is to get high-speed internet to people, because Google makes money when people use the internet, and they don't care who delivers the connectivity. Google is only doing it themselves because ISPs have not stepped up to the plate.
gregman 13y ago
This is exactly the reason Google implemented fiber in the first place. Their intent is not to necessarily dominate the broadband networks, but simply to bring back competition to these oligopolies. Now if only San Francisco could get some decent internet! I've been hoping for monkeybrains to expand further from the Mission so I can drop Comcast.

by tc 13y ago

nlh 13y ago

Agreed. On your first point, I particularly agree that it won't faze Google. While I'm sure they want every business unit to be a money-maker, I don't think Google is worried about the margins getting squeezed. I bet they've figured the value of just having more people on an unmetered high speed connection and might even be willing to lose money on the access. And I'd be particularly surprised if AT&T has a bigger appetite for price wars than Google :)

dclusin 13y ago
I agree with this. If there was any money in the pipes we wouldn't see nearly as many mergers of broadband and content companies. We also wouldn't see content companies getting into broadband either. The nice thing about Google is that their interests as you said are mutually beneficial here. E.g. faster broadband means more money for Google via ad sales. This isn't true with Comcast or other carriers.
mtgx 13y ago
Yeah, if AT&T is trying to play some kind of "chicken game" with Google, they will lose, because Google doesn't care that much about the profits as they do about dramatically increasing the competition in the ISP market. In fact, higher valuer/buck is Google's goal in all of this. AT&T is falling right in Google's "trap", sort of speak (which is a good thing for us). While Google may indeed have some thoughts that with all this popularity and head-start they could become a major ISP in US, their primary and original goal was exactly to get other companies to start offering Gigabit and affordable fiber connections, with no other limits or caps.
- shmerl 13y ago
  Does it mean Google will attempt to become a mobile provider as well? At least they could bring some sense into the market by providing a service with no caps.
  - commandar 13y ago
    I think it's pretty clear that Google isn't interested in being a telecom themselves, but have been making moves to try to push for the telecom industry to get their collective act together. They were instrumental, for example, in getting the FCC to force VZW to treat LTE service as a dumb pipe as a condition of the spectrum sale. And while much has been made of T-Mobile recently going contract-free, Google was pushing that with the original Nexus years ago, and I had a no-contract, un-subsidized G2 through T-Mobile in... 2010? Google already owns a ton of dark fiber, so it kind of makes sense for them to threaten the telecoms with competition to push things along. Building out a mobile network is a much bigger undertaking, so their pushes there have been -- and I suspect will continue to be -- a bit more behind the scenes in nature.
    - Retric 13y ago
      It's not just dumb pipes (ED: dark fiber) they also have YouTube which is ~15% of downstream traffic which they would be happy to stream inside there private network even with peering arrangements.
      - commandar 13y ago
        I was referring to the sale of the 700MHz C Block LTE band. One of the conditions of the spectrum license was that VZW couldn't restrict what devices were allowed on the network and that they couldn't restrict what applications ran over the network. VZW got hit with a $1.25M fine by the FCC last year for blocking tethering apps on LTE. http://www.theverge.com/2012/7/31/3207193/verizon-fcc-tethering-700mhz-open-access-fine http://www.theverge.com/2012/7/31/3207193/verizon-fcc-tether...
  - dragonwriter 13y ago

shmerl 13y ago

Why, it's a clear message to the public as well, which states: AT&T is only ready to improve their service when threatened with competition. Otherwise forget it. At least one has to give them a credit that they had guts to admit it.

aspensmonster 13y ago
Yep. "This expanded investment is not expected to materially alter AT&T’s anticipated 2013 capital expenditures." So, they've had the capability for a while now. They just didn't see any reason to bother with the hassle of deploying a newer technology when they could just keep maintaining U-verse over twisted pair, even if capex stayed the same for either choice. Which is an interesting choice.
- pokoleo 13y ago
  Interesting how the economic impact of this isn't discussed. They very well could've done this years ago, and given the economy a boost. By not doing this, they hold back the American economy. As a non-American, I can only imagine the class-action lawsuits...
  - commandar 13y ago
    Not only that, but the telcos were given massive federal subsidies which they were supposed to use to expand high speed internet connectivity and they never really followed through on their end of the deal. EDIT: http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_002683.html http://www.pbs.org/cringely/pulpit/2007/pulpit_20070810_0026...
- deleted 13y ago
  [deleted]
- jaggederest 13y ago
  To be fair, T's capex expenditures are massive, something like $5 billion per quarter or more. So to 'materially alter', it'd have to be like $3 billion a year or more.

namuol 13y ago

> AT&T is warning them the gravy train stops when they let in Google. The AT&T gravy train just gets replaced with the Google gravy hyper-rail.

joseph_cooney 13y ago

Theodore Vail would be proud.

mortdeus 13y ago

I think this is the kind of behavior Google wants from competitors. Ultimately companies like Google stand to make the most profit from an America with faster internet connections, and the slow overpriced connections are really making cloud related technologies like Google Drive lackluster.

thisisrobv 13y ago

Not sure if the message is that clear. If this were their stance they should have announced multiple cities today instead of piggy backing on the Google in Austin announcement.

brownbat 13y ago

Pretty delightful message for Google, actually. Google never dreamed of becoming a telecom monopolist. It just wants faster, cheaper internet for everyone. Google wants more people online, more people googling, more people clicking on ads. So AT&T's announcement? Exactly what Google wants. Well, this, or AT&T announcing it will sit on its hands while Google patiently erodes their subscriber base. Either one, really, is a win for Google. To use a chess analogy, AT&T (and friends) have been "forked."

spikels 13y ago
I think you are correct that Google wants everyone to have fast and high bandwidth internet connections as it benefits their core search advertising business. Google Fiber is just one of many efforts including Chrome/V8 and Spdy. However going head to head with AT&T in Austin will NOT help this effort. AT&T is signaling Google and, more importantly, other potential gigabit internet service providers that it will compete with you and thus reduce your margins in a very capital intensive (i.e. risky) business. Anybody considers something similar in another city will think again. Does anyone think the timing is a coincidence? If not why is AT&T doing this? I would speculate that AT&T cannot handle any more capital spending and the debt it would require. They can barely keep up with the spending on mobile and their landline business is dying. Internet service over their existing (i.e. paid for) infrastructure has got to be their best business (certainly on return on capital). Google Fibre does them no good.
- dragonwriter 13y ago
  > However going head to head with AT&T in Austin will not help this effort. AT&T is signaling Google and, more importantly, other potential gigabit internet service providers that it will compete with you and thus reduce your margins in a very capital intensive (i.e. risky) business. Lots of firms with an established role in a market "signal" things like that when a competitor is heading to market with a new product ahead of them. Fewer of them follow through effectively.
  - spikels 13y ago

mikeash 13y ago

If this is a message to Google, then AT&T must be pretty stupid. It seems obvious that Google's goal is to get high-speed internet to people, because Google makes money when people use the internet, and they don't care who delivers the connectivity. Google is only doing it themselves because ISPs have not stepped up to the plate.

gregman 13y ago

This is exactly the reason Google implemented fiber in the first place. Their intent is not to necessarily dominate the broadband networks, but simply to bring back competition to these oligopolies. Now if only San Francisco could get some decent internet! I've been hoping for monkeybrains to expand further from the Mission so I can drop Comcast.