6 ms·

Google Fiber franchise wins approval from Portland City Council

113 points by sunilkumarc 12y ago

rayiner 12y ago
I think this is great, but it's really critical to understand the regulatory concessions Google won in this process (FTA): > The agreement exempts Google from a 3 percent "PEG fee" that the city charges Comcast. > Unlike Comcast, Google Fiber is not required to serve all parts of the city. Google says it will operate in "fiberhoods" where subscribers reach a critical mass. So far Google has gotten these sorts of concessions in most if not all of the Google Fiber Cities, over public opposition: http://seattletimes.com/html/businesstechnology/2023420101_briercolumn21xml.html http://seattletimes.com/html/businesstechnology/2023420101_b.... Provisions like these are key barriers to establishing competition in other markets, especially for companies that don't have the negotiating clout of Google. The media has tended to focus on the Google versus cable/telco fight, but at least as important if not more so is the precedent that Google's hardball tactics are setting for municipalities: if you want fiber, you have to give up these terms in franchise agreements. Google's efforts here will be a huge boon to companies like RCN that are attempting to build fiber in cities with established cable or telecom competitors. There's also a third interesting point: > Portland and Google will participate in a "joint defense" of the franchise if it faces a legal challenge over allegations it gave Google Fiber preferential treatment, exceeded the city's authority, or violates the law in some way.
- ColinDabritz 12y ago
  I think the concerns are reasonable, but Google did give some different promises in exchange, including free internet for non-profits, free wifi networks in some areas, and their usual "free 5 megabits after install costs" access. The TV service will carry the local PEG channels. I think trading short term franchise concessions for a few years makes sense. Later on I would require them to cover all households in general areas they operate in, for example. I am cautiously optimistic.
  - rayiner 12y ago
    Yes, Google is offering free internet after a $300 up-front payment, in neighborhoods that otherwise justify fiber deployment. In contrast, for example, cable companies are generally required to offer basic service everywhere in the franchise area for $15-20 per month. Given that most of the cost of deployment is building to the neighborhood, and that neighborhoods are economically segregated in most cities, the former concession is much less onerous than the latter. Again, I don't think fiber should be beholden to universal access. I'm just pointing out Google has won a major political battle here that has major precedential value.
    - nandhp 12y ago
      In Kansas City, the "pick your plan" phase only came after the "qualify your fiberhood" phase. http://googlefiberblog.blogspot.com/2012/07/how-to-get-google-fiber.html http://googlefiberblog.blogspot.com/2012/07/how-to-get-googl... > After the rally, we’ll let you know if your fiberhood has reached its goal. If so, you can sign up for your service package. The first homes will get service shortly after the rally ends, and all qualifying neighborhoods will receive service before the end of 2013.
      - rayiner 12y ago
        Fair enough, but: > All you need to do for pre-registration is provide some basic information (like your name and address) and pay a $10 deposit [with a credit card]. When the results first came in, the fiberhoods were divided among racial and economic lines: http://www.newsweek.com/2014/02/21/google-making-digital-divide-worse-245546.html http://www.newsweek.com/2014/02/21/google-making-digital-div.... Now Google did a lot after the fact to generate interest in those neighborhoods that had been left-out, and sign up more of them. But let's not forget they have substantial PR reasons for doing so. My intention isn't to question Google's motives, but to point out that even Google has refused to accept build-out requirements, of the sort that are almost universally included in franchise agreements. What does that tell you about how these requirements impact competition in other markets? What impact do they have on potential fiber ISP's who don't have Google's PR motivations?
- JoshTriplett 12y ago
  > Unlike Comcast, Google Fiber is not required to serve all parts of the city. The sentence immediately following that makes the nature of that "concession" clear: 'Google says it will operate in "fiberhoods" where subscribers reach a critical mass.' In other words, the same process Google has already followed in other cities: get people to express interest in fiber, then go to where those potential customers are first. This isn't about skipping low-income neighborhoods; this is about prioritizing customers over non-customers, which seems completely reasonable. There's little point in forcing universal availability in areas where nobody intends to actually use the service. Given that it isn't possible to instantly roll out the service to every area at once, it makes sense to prioritize expansions by the number of customers, and cover the areas with fewer customers later. Interestingly, that might also tend to prioritize areas not currently covered by the existing Frontier fiber network (areas only served by Comcast or DSL), since those areas would have more people eager for fiber.
  - rayiner 12y ago
    I've edited my OP to reflect that sentence, and I agree that it's a reasonable criterion. However, it's a much less stringent requirement than what's usually present in a cable company franchise agreement. Cable companies generally must serve every neighborhood above a certain density, whether or not there are enough interested subscribers. And by law they are usually required to provide a minimum tier of service, usually at around $15-20 per month. Google's policy will absolutely have the effect of skipping low-income neighborhoods. It's cheapest (gigabit) rate plan in Kansas is $70 per month. The whole point of the policy is to not bother to build fiber out to a neighborhood until there are enough $70 per month subscribers to justify the expense. This is precisely what traditional franchise agreements prevent, and precisely why they have the effect of keeping out competition. Only the incumbent can commit to that sort of requirement profitably.
    - MatthewMcDonald 12y ago
      Actually, there's a much cheaper option if you pay the installation fee of $300.[0] This works out to $25/month over one year. While $300 is a significant amount (especially for people with lower incomes), it is an option and is a fraction of the cost when you look at the long term. https://fiber.google.com/cities/kansascity/plans/ https://fiber.google.com/cities/kansascity/plans/
- wcfields 12y ago
  > The agreement exempts Google from a 3 percent "PEG fee" that the city charges Comcast. NO NO NO NO NO NO NO This is very very very bad and sets a horrible precedent. Portland has one of the best cable-access facilities and set of stations in the country. They serve a vital public interest, allow absolute free expression, and "professionalize" niche programs that otherwise would just be someone talking into a webcam.
  - andrewpi 12y ago
    In the age of YouTube, is public access TV really that necessary anymore?
  - tptacek 12y ago
    Am I misunderstanding you or are you suggesting that anyone who provides Internet service in Portland should be subsidizing public access television?
    - wmf 12y ago
      Note that Google Fiber is essentially a cable company since they provide TV. Whether a company uses coax, twisted pair, or fiber isn't relevant to video franchise agreements. http://en.wikipedia.org/wiki/Multichannel_video_programming_distributor http://en.wikipedia.org/wiki/Multichannel_video_programming_...
  - mullingitover 12y ago
    Requring an ISP to fund a public access channel is like requiring auto factories in the early 1900s to provide free hay to nearby stables.
    - Atroxide 12y ago
      In your analogy, these auto factories would also bundle each bought car with a horse. Google sells TV service, just like any other TV provider. (Not disagreeing with you necessarily, just pointing out a flaw in your analogy)
  - 12y ago
- dublinben 12y ago
  Some fiber is better than no fiber. Verizon has used these whole city requirements as an excuse to avoid wiring any part of major cities. As a result, the densest neighborhoods of most US cities have worse internet than the affluent suburbs around them.
pdxandi 12y ago
I've been impressed with our city council so far. Now let's hope they legitimize short-term rentals so we can continue offering Airbnb in Portland.
rdl 12y ago
What would be really awesome would be Google Fiber covering Portland and somehow covering Vancouver, WA too.
- canadaj 12y ago
  And then the rest of WA!
mwsherman 12y ago
Not that this isn’t good news – it is – but it’s taken 4 years to get to this point: http://blog.oregonlive.com/siliconforest/2010/03/portland_city_council_backs_go.html http://blog.oregonlive.com/siliconforest/2010/03/portland_ci... Still no fiber in the ground. This sort of negotiation is such a huge barrier to entry that only very big (or incumbent) companies have a fighting chance. Obviously, Google entering the market is a big deal and good news – two competitors is better than one. But only a company of the size and regulatory savvy of Google would even try.
waterfowl 12y ago
Come on progressive portland, build a municipal fiber network like my redneck hometown in Tennessee.
f3llowtraveler 12y ago
I thought America had free markets? So then why do people need permission from government councils in order to compete in Internet access?

113 points by sunilkumarc 12y ago

I think this is great, but it's really critical to understand the regulatory concessions Google won in this process (FTA): > The agreement exempts Google from a 3 percent "PEG fee" that the city charges Comcast. > Unlike Comcast, Google Fiber is not required to serve all parts of the city. Google says it will operate in "fiberhoods" where subscribers reach a critical mass. So far Google has gotten these sorts of concessions in most if not all of the Google Fiber Cities, over public opposition: http://seattletimes.com/html/businesstechnology/2023420101_briercolumn21xml.html http://seattletimes.com/html/businesstechnology/2023420101_b.... Provisions like these are key barriers to establishing competition in other markets, especially for companies that don't have the negotiating clout of Google. The media has tended to focus on the Google versus cable/telco fight, but at least as important if not more so is the precedent that Google's hardball tactics are setting for municipalities: if you want fiber, you have to give up these terms in franchise agreements. Google's efforts here will be a huge boon to companies like RCN that are attempting to build fiber in cities with established cable or telecom competitors. There's also a third interesting point: > Portland and Google will participate in a "joint defense" of the franchise if it faces a legal challenge over allegations it gave Google Fiber preferential treatment, exceeded the city's authority, or violates the law in some way.

ColinDabritz 12y ago
I think the concerns are reasonable, but Google did give some different promises in exchange, including free internet for non-profits, free wifi networks in some areas, and their usual "free 5 megabits after install costs" access. The TV service will carry the local PEG channels. I think trading short term franchise concessions for a few years makes sense. Later on I would require them to cover all households in general areas they operate in, for example. I am cautiously optimistic.
- rayiner 12y ago
  Yes, Google is offering free internet after a $300 up-front payment, in neighborhoods that otherwise justify fiber deployment. In contrast, for example, cable companies are generally required to offer basic service everywhere in the franchise area for $15-20 per month. Given that most of the cost of deployment is building to the neighborhood, and that neighborhoods are economically segregated in most cities, the former concession is much less onerous than the latter. Again, I don't think fiber should be beholden to universal access. I'm just pointing out Google has won a major political battle here that has major precedential value.
  - nandhp 12y ago
    In Kansas City, the "pick your plan" phase only came after the "qualify your fiberhood" phase. http://googlefiberblog.blogspot.com/2012/07/how-to-get-google-fiber.html http://googlefiberblog.blogspot.com/2012/07/how-to-get-googl... > After the rally, we’ll let you know if your fiberhood has reached its goal. If so, you can sign up for your service package. The first homes will get service shortly after the rally ends, and all qualifying neighborhoods will receive service before the end of 2013.
    - rayiner 12y ago
      Fair enough, but: > All you need to do for pre-registration is provide some basic information (like your name and address) and pay a $10 deposit [with a credit card]. When the results first came in, the fiberhoods were divided among racial and economic lines: http://www.newsweek.com/2014/02/21/google-making-digital-divide-worse-245546.html http://www.newsweek.com/2014/02/21/google-making-digital-div.... Now Google did a lot after the fact to generate interest in those neighborhoods that had been left-out, and sign up more of them. But let's not forget they have substantial PR reasons for doing so. My intention isn't to question Google's motives, but to point out that even Google has refused to accept build-out requirements, of the sort that are almost universally included in franchise agreements. What does that tell you about how these requirements impact competition in other markets? What impact do they have on potential fiber ISP's who don't have Google's PR motivations?
JoshTriplett 12y ago
> Unlike Comcast, Google Fiber is not required to serve all parts of the city. The sentence immediately following that makes the nature of that "concession" clear: 'Google says it will operate in "fiberhoods" where subscribers reach a critical mass.' In other words, the same process Google has already followed in other cities: get people to express interest in fiber, then go to where those potential customers are first. This isn't about skipping low-income neighborhoods; this is about prioritizing customers over non-customers, which seems completely reasonable. There's little point in forcing universal availability in areas where nobody intends to actually use the service. Given that it isn't possible to instantly roll out the service to every area at once, it makes sense to prioritize expansions by the number of customers, and cover the areas with fewer customers later. Interestingly, that might also tend to prioritize areas not currently covered by the existing Frontier fiber network (areas only served by Comcast or DSL), since those areas would have more people eager for fiber.
- rayiner 12y ago
  I've edited my OP to reflect that sentence, and I agree that it's a reasonable criterion. However, it's a much less stringent requirement than what's usually present in a cable company franchise agreement. Cable companies generally must serve every neighborhood above a certain density, whether or not there are enough interested subscribers. And by law they are usually required to provide a minimum tier of service, usually at around $15-20 per month. Google's policy will absolutely have the effect of skipping low-income neighborhoods. It's cheapest (gigabit) rate plan in Kansas is $70 per month. The whole point of the policy is to not bother to build fiber out to a neighborhood until there are enough $70 per month subscribers to justify the expense. This is precisely what traditional franchise agreements prevent, and precisely why they have the effect of keeping out competition. Only the incumbent can commit to that sort of requirement profitably.
  - MatthewMcDonald 12y ago
    Actually, there's a much cheaper option if you pay the installation fee of $300.[0] This works out to $25/month over one year. While $300 is a significant amount (especially for people with lower incomes), it is an option and is a fraction of the cost when you look at the long term. https://fiber.google.com/cities/kansascity/plans/ https://fiber.google.com/cities/kansascity/plans/
wcfields 12y ago
> The agreement exempts Google from a 3 percent "PEG fee" that the city charges Comcast. NO NO NO NO NO NO NO This is very very very bad and sets a horrible precedent. Portland has one of the best cable-access facilities and set of stations in the country. They serve a vital public interest, allow absolute free expression, and "professionalize" niche programs that otherwise would just be someone talking into a webcam.
- andrewpi 12y ago
  In the age of YouTube, is public access TV really that necessary anymore?
- tptacek 12y ago
  Am I misunderstanding you or are you suggesting that anyone who provides Internet service in Portland should be subsidizing public access television?
  - wmf 12y ago
    Note that Google Fiber is essentially a cable company since they provide TV. Whether a company uses coax, twisted pair, or fiber isn't relevant to video franchise agreements. http://en.wikipedia.org/wiki/Multichannel_video_programming_distributor http://en.wikipedia.org/wiki/Multichannel_video_programming_...
- mullingitover 12y ago
  Requring an ISP to fund a public access channel is like requiring auto factories in the early 1900s to provide free hay to nearby stables.
  - Atroxide 12y ago
    In your analogy, these auto factories would also bundle each bought car with a horse. Google sells TV service, just like any other TV provider. (Not disagreeing with you necessarily, just pointing out a flaw in your analogy)
- 12y ago
dublinben 12y ago
Some fiber is better than no fiber. Verizon has used these whole city requirements as an excuse to avoid wiring any part of major cities. As a result, the densest neighborhoods of most US cities have worse internet than the affluent suburbs around them.

pdxandi 12y ago

I've been impressed with our city council so far. Now let's hope they legitimize short-term rentals so we can continue offering Airbnb in Portland.

rdl 12y ago

What would be really awesome would be Google Fiber covering Portland and somehow covering Vancouver, WA too.

canadaj 12y ago
And then the rest of WA!

mwsherman 12y ago

Not that this isn’t good news – it is – but it’s taken 4 years to get to this point: http://blog.oregonlive.com/siliconforest/2010/03/portland_city_council_backs_go.html http://blog.oregonlive.com/siliconforest/2010/03/portland_ci... Still no fiber in the ground. This sort of negotiation is such a huge barrier to entry that only very big (or incumbent) companies have a fighting chance. Obviously, Google entering the market is a big deal and good news – two competitors is better than one. But only a company of the size and regulatory savvy of Google would even try.

waterfowl 12y ago

Come on progressive portland, build a municipal fiber network like my redneck hometown in Tennessee.

f3llowtraveler 12y ago

I thought America had free markets? So then why do people need permission from government councils in order to compete in Internet access?