Google Project May Spur Broadband Competition - NYTimes.com

Google Project May Spur Broadband Competition - NYTimes.com

The take away from this story is it's highly unlikely incumbent telephone and cable companies will upgrade and build out their infrastructures to provide better Internet connectivity and serve more premises.  It makes more business sense for them to preserve the status quo and harvest whatever profits can be had from their existing cable plants. Particularly given the fact that the legacy incumbents pay fat dividends to their shareholders. Google pays none.

The NY Times piece postulates it will take an third party like Google to break the inertia.  But Google thus far is pursuing fiber builds in only a few metro areas of the United States including Kansas City and Austin and lacks a strategy to serve the nearly 20 million Americans forced to live off the Internet grid because the incumbent telcos and cablecos won't serve their homes.  These areas will have to rely on good old fashioned American self help and build fiber to the premises infrastructure operated by local governments and consumer cooperatives as was done in much of the nation in the 1930s and 1940s for electricity and telephone service.

There's also the sheer enormity of the financial challenge that would test the resources of even the deepest pocketed players like Google.  In 2009, the U.S. Federal Communications Commission projected it would cost $350 billion to universally deliver 100 Mbps or faster Internet connections to all American homes and businesses.  That's more than the sum of Google's 2012 revenues.

California PUC-created nonprofit warrants review

Today’s Sacramento Bee reports on the increased legislative scrutiny being applied to the California Public Utilities Commission and whether it is adequately fulfilling its mission of ensuring safe and reliable utility service.

According to the Bee, a California Senate committee is requesting that the state’s Fair Political Practices Commission investigate nonprofits established by the PUC for “possible conflicts of interest or bequesting violations” including the California Emerging Technology Fund (CETF).

Lawmakers should also look into whether the CETF is fulfilling its stated mission “to close the ‘Digital Divide’ by accelerating the deployment and adoption of broadband to unserved and underserved communities and populations.”

A review of the CETF website, its annual reports and a summary of 2013 grant investments shows no funding awarded to advance the direct, tangible deployment of advanced telecommunications infrastructure to serve residential premises despite findings by a state broadband task force in 2008 that nearly 2,000 California towns and communities lack broadband access.

Without the infrastructure for broadband access, promoting its adoption is putting the cart before the horse and nothing more than window dressing. This is policy failure piled on top of market failure.

WISP targets incumbent wireline providers

An El Dorado County, California Wireless Internet Service Provider (WISP) is challenging incumbent telephone and cable providers in a small, suburban segment of the county.

Cal.net's "Urban Wireless Internet" is offered at a flat $40 monthly fee with no contractual commitments -- clearly aimed at undercutting the triple play bundle pricing of the incumbents.  The service offering claims asymmetrical connectivity of 15 Mbs down and 3 Mbs up. There's a $95 installation fee.

FTTN: An alternative Google fiber model to build out Internet infrastructure

Google has been getting a lot of attention lately over its current and planned fiber to the premise (FTTP) builds in Kansas City, Austin, Texas and potentially Provo, Utah. But Google is unlikely to expand that model to the outer suburban, exurban and rural areas of the United States anytime soon for the same reason the incumbent telephone and cable companies have declined to do so: too few potential subscribers to justify the business case for the sizeable investment.
 

However, Google may be able to make the numbers pencil better with a fiber to the node (FTTN) network in these unserved and underserved areas, mixing in aerial fiber cable plant where the cost of burying fiber conduit is overly expensive. Using the FTTN model described in this November 2008 white paper, Google would bring Internet “trunk” connections to neighborhood nodes.  Property owners could join together in a telecom cooperative – compared to a condominium in the paper -- to build the final fiber segment to bridge the gap from their premises to the neighborhood nodes.  The cost of the construction for those projects in rural areas can be financed by low cost, long term loan funding offered by the federal Rural Utilities Service.

The paper notes the property owners would economically benefit given research showing adding a fiber “tail” to a residential property increases its marketability, thereby allowing property owners to recoup and potentially profit from any upfront investment they would have to make to fund the cooperative and get wired up.

It’s worth noting that although disclaiming official representation of Google, the white paper titled Homes with Tails: What if you could own your Internet connection? is co-authored by Derek Slater, a Google policy analyst. Back when Slater wrote the paper, Google wasn’t in the fiber infrastructure business. Now that it is, Google management would be well advised to dust off Slater’s paper and give it another look.

Look Out Google Fiber, $35-A-Month Gigabit Internet Comes to Vermont - Digits - WSJ

Look Out Google Fiber, $35-A-Month Gigabit Internet Comes to Vermont - Digits - WSJ: VTel’s Chief Executive Michel Guite says he’s made it a personal mission to upgrade the company’s legacy phone network, which dates back to 1890, with fiber for the broadband age. The company was able to afford the upgrades largely by winning federal stimulus awards set aside for broadband. Using $94 million in stimulus money, VTel has invested in stringing 1,200 miles of fiber across a number of rural Vermont counties over the past year. Mr. Guite says the gigabit service should be available across VTel’s footprint in coming months.

VTel joins an increasing number of rural telephone companies who, having lost DSL share to cable Internet over the years, are reinvesting in fiber-to-the-home networks.

As Google targets large metro areas of the United States for fiber rollouts, small incumbent local exchange carriers (ILECs) like this one are upgrading their outmoded copper cable infrastructure with fiber to the premise (FTTP). Nevertheless, significant gaps will remain, particularly in areas of the U.S. served by top tier telcos like AT&T and Verizon that have essentially put their copper networks into runoff mode with no plans to upgrade them with fiber plant as they concentrate their CAPex on mobile wireless services.  Due to their smaller populations, these areas are also unlikely to attract Google fiber and will have to build their own community-based FTTP networks.

Google's Fiber Takeover Plan Expands: Will Kill Cable & Carriers

Google's Fiber Takeover Plan Expands: Will Kill Cable & Carriers - Google is going to kill AT&T, Verizon, Sprint, T-Mobile and the cable companies. Kids don’t talk on the phone and they don’t have a ton of money. If they can be reasonably sure they’ll have a wifi network, then they are simply not going to sign up for AT&T or Verizon.

It’s game over... in five short years.

This hyped up prediction calls for a reality check.  In 2009, the U.S. Federal Communications Commission projected it would cost $350 billion to universally deliver 100 Mbps or faster Internet connections to all American homes and businesses, which would like Google's 1 Gigabit service would require fiber to the premise infrastructure. (Consider when the FCC issued this cost projection in September 2009, 100 Mbps was considered the gold standard for Internet throughput -- just one tenth of what Google fiber delivers.)

Assuming minimal change in the cost of deployment -- about 70 percent being labor -- that sizable sum would require Google to expend an average of $70 billion each of the five years -- $20 billion more than Google's reported revenues for 2012.  If this article's prediction were to become reality, Google would have to joint venture with other deep pocketed players since it alone could not hope to singlehandedly render the nation's cable and telephone companies obsolete in the span of just half a decade.

Google chooses Provo, Utah, as next city to receive search giant's ultra-fast Internet service | Fox News

Google chooses Provo, Utah, as next city to receive search giant's ultra-fast Internet service | Fox News: The rollout is an expensive undertaking and gamble for Google, which hopes it will drive innovation and pressure phone and cable companies to improve their networks. Google benefits when people spend more time online.

The "pressure phone and cable companies to improve their networks" rationale is  repeatedly made in media accounts to explain Google's fiber to the premise (FTTP) builds in some metro areas of the United States.  But is it really true, notwithstanding AT&T's pyrrhic posturing in Austin, Texas?  It implies the incumbent cable providers and telcos are somehow reluctant to improve their networks.  But upgrading their networks is how they can capture more customers and sell more services.  If doing so generated sufficient revenues and profits, they would do it without hesitation, Google or no.  The issue is their business models don't have sufficient funding for large scale capital expenditures on new plant and equipment.  And no one has yet devised a way to more cheaply deploy fiber to the premise Internet infrastructure -- of which an estimated 70 percent of the cost is labor.

Another major issue overlooked in media accounts of the Google FTTP builds is they don't address the large gaps in Internet access that the U.S. Federal Communications Commission in 2012 estimated leave about 19 million Americans offline.  The reason they don't is Google shares the same limitations of the investor-owned business model as the incumbent cablecos and telcos that cannot profitably serve areas that remain disconnected and still accessing the Internet via obsolete, circa 1993 dialup connections and satellite Internet.