

Something About Google Fiber Doesn't Sit Right with Me - InfinityX0
http://mikecp.net/post/31066632906/something-about-google-fiber-doesnt-sit-right-with-me

======
ChuckMcM
Ok, if we're going to talk about 'vibes' then lets talk about this one, "Why
is someone who is a search engine marketer deconstructing on Google's
infrastructure build?" and why is that same article posted to a tech news site
by a user with the name of an entrenched infrastructure player? Ok, so it
smells like astroturf, but let's set that aside for a moment.

Remember reading all those articles about how SpaceX was 'cheating' or risking
safety because their costs were so much less than what 'people who knew how to
build rockets' charged? Its a simple rhetoric technique, compare X to Y when X
and Y aren't correlated or even have a casual relationship.

Anyway, rather than devolve into some sort of ad-hominem rebuttal, lay out
what the costs are for putting fiber into an area. There are easement costs
(ok the City covered that), there are facilities (cooling and power for a
bunch of switches and routers), IP transit costs and general IP costs (like
routable addresses or not). Then there are the sunk costs of installing this
stuff.

So one source [1] puts getting fiber to the home at less than $1,000. How many
homes are there in KS? The census puts it at about 463,200 [2]. So lets say
the average house hold is 2.0 people so that represents 231,700 homes? or
$231,700,000 to install fiber to all of them? A lot lower than the estimates
put out by the OP.

What is the long term value of customers there? Well we can pretty much assume
nobody would be stupid enough to pick Comcast or a bell company for Internet
service (10x the cost for 1/100th the bandwidh) so lets say that Internet
penetration is 60% [3] so 139 thousand homes, if they got the 'cheap' stuff at
$70/month that is $9.73M / month. So how much does Google earn on that
revenue? We don't know but we can work it backwards, lets say all up it cost
Google 4x what it costs Verizon to lay fiber so $1B, lets further say that
fiber is good for 20 years of lifetime. $9.73M$/month times 20 years of 12
months is $2.3B. That is double the investment of $1B back in 20 years. Now
not a great rate of return, most would like to see it double twice in 20
years. But not an insane proposition either.

Personally, if ComCast is right and Google is making a huge mistake, I think
they should just sit back and watch it happen right? So clearly going to fail
at this, their job is done, they can just eat popcorn while the big G sinks
under the waves and stops being a thorn in their side. Me though, I would not
bet against Google on this one.

[1]
[http://connectedplanetonline.com/mag/telecom_riding_fttp_cos...](http://connectedplanetonline.com/mag/telecom_riding_fttp_cost/)

[2] [http://www.google.com/publicdata/explore?ds=kf7tgg1uo9ude_&#...</a><p>[3]
<a href="http://arstechnica.com/tech-policy/2009/06/us-20th-in-broadband-
penetration-trails-s-korea-estonia/"
rel="nofollow">http://arstechnica.com/tech-policy/2009/06/us-20th-in-
broadb...</a>

------
oliwarner
These short-sighted comments really annoy me. I would give parts of my
reproductive system to get a fraction of a Google branded fibre and people are
getting angsty about what Google gets "in return".

No the sums don't add up. Tax payers will subsidise some of the costs and
Google will undoubtedly analyse the traffic to deliver yet even more
personalised advertising. The local government will subsidise parts of the
installation and make it legally as smooth as possible. Google will probably
get cheaper offices or easier planning application processes, and who knows,
they'll probably have some sway when it comes to local lawmaking, like any
major contributing lobbyist...

... But in return _Kansas City gets a bloody gigabit network_ for pittance.
Free ADSL for anybody else.

It's practically unimaginable the services you could deliver to people with
that sort of bandwidth because for a very long time it's been considered rude
to assume anybody has anything faster than a 2Mbps connection. Google Fibre
_could_ stream 4k (with h.265). Even being able to assume the user has some
upstream bandwidth for once is a complete boon to developers. In the UK the
ratio is 10:1 almost everywhere unless you're on a business line (for four
times the price) or the new FTTC options that are available in like 2% of the
country.

tl;dr: you get a lot in exchange for letting Google in, not least that you
will probably become the testing bed for all sorts of snazzy new technology.
Stop moaning, pay your taxes and enjoy being able to watch all the porn at
once.

~~~
NPC82
>"No the sums don't add up. Tax payers will subsidise some of the costs and
Google will undoubtedly analyse the traffic to deliver yet even more
personalised advertising. The local government will subsidise parts of the
installation and make it legally as smooth as possible."

As much as I agree with you, this quote highlights something that cycles
through my mind whenever I read about Google's ambitions. Basically, Google is
doing and motivating people to do what our government should (and as we read,
apparently somewhat _can_ in some ways) do to improve our communications
infrastructure. It annoys me to think that we could simply be building a new
(potentially more neutral) fiber "highway" across the country with a similar
model, run by the government. If only people weren't so afraid of government
and hell bent on handing things off to private sector instead of the public
sector. It's disappointing, and I feel in the very long run it could very well
backfire on all of us if google succeeds and becomes the next AT&T.

~~~
greenyoda
"It annoys me to think that we could simply be building a new (potentially
more neutral) fiber 'highway' across the country with a similar model, run by
the government. If only people weren't so afraid of government..."

The government has given us many reasons why we should fear a government-
operated internet infrastructure. Do you really want the same government
that's seizing web domains without due process to control the physical
infrastructure as well? The same government that wants to vacuum up all the
internet traffic of law-abiding citizens? That does warrantless wiretaps? That
runs the TSA? Be careful what you wish for.

------
OzzyB
This is incredibly disingenuous I don't know whether to laugh or fucking cry.

We are talking about Kansas City here! A city that has long since been a
shadow of its former self -- once a major US hub facilitating cross-statewide
trade -- now a landscape of empty derelict factories and office buildings.

At least it was before the City Planners (read: OMG! The Government) did
something about it.

For the last few years there has been a huge concerted effect to revive Kansas
City and save it from a fate of "Detroitism". Is that so bad? No, it isn't,
unless you're of the belief that all of America's cities' outside of LA/NYC
should just "suck it up and deal with it" and be the subject of the next "Ruin
Porn" hipster tumblr blog.

We are now starting to see some the fruits of these efforts: Sprint Center
(Stadium), Kaufmann Center for the Performing Arts and many many other
revitalization projects, including Google Fiber.

Spare me.

------
malandrew
This isn't about bandwidth. It's about content. The only thing standing
between YouTube and the CableTV providers is bandwidth.

If Google cracks the bandwidth nut, they can essentially replace TimeWarner,
Comcast, etc. in one fell swoop because they can easily replace 100% of the
services those companies offer at a fraction of the cost.

Kansas City is essentially giving Google free reign to perfect their rollout
and implementation processes. The next city that Google wires up will probably
cost them a fraction of what Kansas City does because I'm certain that Google
will automate every last detail that can be automated.

~~~
tbundy
I've got to agree with you an many others in the comments. The thing that
"doesn't sit right" is that Google is looking at alternative ways to benefit
their company while benefiting the community. There's always going to be a
risk of monopoly. In Australia, the fiber roll-out is government owned and
funded, replacing a former government telco monopoly with a current government
telco monopoly. If the price is right and there's still competition, I think
we should be vigilant but happy.

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rbright
"To get that in writing, that’s 91.58 Mbps down and 35.01 Mbps up."

No. That's how fast speedtest.net is. Google Fiber is much, much faster. Try
it again with <http://speedtest.googlefiber.net/>

~~~
oliwarner
Yeah the 48ms ping was a dead giveaway that something in that test wasn't
right. Bad wireless, dodgy connection, poorly chosen server.

An Ethernet→router→fibre→local-speedtest node trip should be closer to 5ms, if
that.

------
SoftwareMaven
Of course Google is "doing this to upset the status quo". The status quo makes
a lot of money providing a crappy product with crappy service. Google wants to
disrupt that by providing a good product (probably with crappy, but better,
service, if they hold true to form) so they can _become_ the new status quo.

And if KC invests in this and can see some knowledge worker jobs come to the
Heartland, that seems like a true investment and not a dole.

------
csssc
It's not the "way to good to be true vibe", it's just that people in the US
think that they have the best of everything so how can we have something out
there so much better for the same. When in reality the US is far behind in
infrastructure in a whole. So why this upgrade looks amazing the truth is its
the only thing on par with the rest of the developed world.

~~~
patrickaljord
Define "rest of the world", in most of South America, people get 100kb/s down
and 20kb/s up. I guess most of Africa and Asia bar Japan, South Korea and a
few others aren't fast either.

~~~
jarek
I don't know if grandparent post has been edited but it says "rest of the
developed world" now.

------
Olreich
Lachman's numbers are wrong. Not that those numbers are innaccurate, but that
they aren't comparing the right numbers. According to Lachman, the price to
connect a single home via fiber is $1250. The price that Google is selling
it's service for is $70 a month. If there is no maintenance cost, the return
on investment starts happening at month 18 of service. Assuming maintenance
costs are a little less than half the installation costs, that gives us around
$600 per year.

Cost to Connect: $1250 - $300 = $950

Cost to Maintain/Year: $600

Price/Year: $840

So, assuming that the income chart looks sort of like this, then the point at
which it becomes profitable is 4 years. And this assumes that Google doesn't
get more efficient.

------
james4k
Google Fiber is supposedly about 10 times faster than that. Presumably, the
bandwidth test server was being maxed out. His comparison based on the 91 Mbps
result makes current ISPs look better than they should.

> For comparison, where with Comcast I can download a 1080p Breaking Bad
> episode (1.86 GB) in about a half hour, Google Fiber would get it done in
> under 3 minutes.

On Google Fiber, that Breaking Bad episode would be downloaded in about 15
seconds at max throughput.

~~~
zzleeper
Is it possible the WiFi, or a crappy laptop's hdd, are the culprits for the
bottleneck?

~~~
jarek
I've definitely had speedtest.net results constrained by wifi and a slow
laptop that couldn't run the flash control that well.

------
walterkim
I get synchronous 200mbps from Webpass for $450 a year. They don't provide
content or services on top of that, which means they don't have incentives to
analyze my data, nor will they attain perverse infrastructural advantages over
other online services. It is the proverbial "dumb pipe" many here wish they
had. And I'm very happy with that.

I don't want a world where Google runs my internet connection any more than I
want a world where Microsoft, Apple, Cisco, Amazon or Facebook does.

------
beering
None of this should come as a surprise. Remember when Google was asking cities
across America to apply for the privilege of being the first city to have
Google Fiber? Cities were competing against each other for Google Fiber.

Google didn't choose Kansas City for no reason. They chose them because KC was
willing to be abnormally accommodating in letting Google roll out. After all,
if you're going to launch an ambitious, experimental project, you want
regulatory red-tape to be the least of your worries.

------
tammer
Wait, I think I know what it is..... Hmm, what's that word.....? Oh yeah.....

Privatization!

Of course it's less than ideal! In a perfect world, we'd have had a nationwide
gigabit deployment years ago. Internet would be a global human right, yada
yada.

------
kevinpet
It never occurred to me that profitability was a goal for google fiber. From
the start I took it to be a pilot program to understand how people would be
using the internet a few years in the future.

------
jimrandomh
I remember an article, way back, which claimed that YouTube was running at a
loss, based on a dramatic over-estimation of its costs. This looks like the
same thing again: unsupported assertion that Google's costs are going to be
huge (because other telcos, which are very wasteful in ways that Google isn't,
have huge costs).

I also think this article may be understating the upside, from Google's
perspective. It looks like Google wants to displace cable companies not just
as ISPs, but also as television distributors, replacing them with YouTube.
That'd be worth a lot of money, and it's something they could reasonably
achieve - but they need something like Google Fiber to put them in a good
bargaining position with the content producers.

------
endlessvoid94
I fail to see how any of the things you mentioned are negative.

~~~
tagawa
Taxpayers paying for a commercial service whether they use it or not sounds
like one. Special privileges and fast-tracking is another.

~~~
dfc
You think _"taxpayers paying for a commercial service whether they use it or
not"_ sounds like a problem. Other people think this sounds like economic
development.

------
lbcadden3
Who in there right mind ever thought there was not a 'make money' angle here.
Still want it, still trying to get wife to move to KC.

------
bryanlarsen
I'm fairly sure that Google is paying a lot less than $1250 per customer.

1) it costs a lot less to wire a whole neighbourhood than to wire a single
house

2) kansas city was chosen because they could run the fiber on telephone poles
rather than digging trenches (and they're not paying anything for access to
those poles)

Google has stated that the $300 cost they're charging is the cost of wiring up
a home, and I believe thats what they think it will cost. There probably will
be overages and complications they don't have in their model, but I think that
$300 is fairly close.

------
notatoad
>Well, then. It seems many Kansas City taxpayers will be paying for Google
Fiber whether they sign up or not.

I guess that's why google fibre includes a free service tier.

------
gallerytungsten
re:

"It seems many Kansas City taxpayers will be paying for Google Fiber whether
they sign up or not. It also seems that Google has a LOT of free and
unregulated access in the city. Kansas City could become a testbed for many a
Google project."

[because] 'Google received stunning regulatory concessions and incentives.'
[quoted within article.]

Yeah. Google got regulatory concessions not available to the 99%. Is that a
surprise? This is how "business" is done with local governments across the
country. Big businesses routinely get special deals in return for major
investment.

Many times, these "investments" don't pan out. Local governments frequently
fail to include clawback provisions for those occasions when Scam, Inc., takes
the money and runs. It's a bet every time.

As to whether Kansas City taxpayers will pay: the fact is, they have already
paid for the infrastructure. (Or they're still paying, via bonds.) So what?
Google getting access to rights-of-way sounds like a bet that's better than
average.

Proof is in the numbers. (Nice download speeds and the end user costs.) I hope
the City Council of New Orleans, LA can get as good a deal.

------
BenoitEssiambre
What are the prices of competitors in the US? Here in New-Brunswick Canada,
prices are:

80Mbps down & 30Mbps up: $69.95 /mo. for first 3 months then $100.95 /mo.

50Mbps down & 30Mbps up: $29.95 /mo. for first 3 months then $83.95 /mo.

20Mbps down & 15Mbps up: $29.95 /mo. for first 3 months then $68.95 /mo.

Seems to be not that far from Google's prices.

~~~
oliwarner
Not far from their prices - miles from their product. You're comparing 110Mbps
for $100/month against 1000Mbps* for $70/month and saying they're near equal.

That doesn't make sense to me.

*I'm judging from a speed test posted on the blog post that the line is asymmetric and down and upstream add up to 1Gbps.

~~~
jarek
The speedtest result posted in the blog post is really bad. 91.58 Mbps down
and 35.01 Mbps up add up to "127 Mbps" in terms of your comparison. Of course,
Google Fiber is much faster than that.

For the record, I'm currently paying $30/month (normal price $62/month) for
25/2 DSL in Vancouver, BC. If you live in a wired-up building, you can get
25/10 for $38/month, 50/10 for $62, 100/10 for $83, and 300/15 for $113 from a
boutique ISP.

------
FireBeyond
"To get that in writing, that’s 91.58 Mbps down and 35.01 Mbps up. For
basically the same price, I’m lucky if I can get 9 Mbps down from Comcast here
in Seattle. And that’s probably the fastest residential I’ve had in my life."

I use Comcast in Seattle. I pay $109 a month (for Business Class). Right now,
I get 55mbps down, 35mbps up.

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mcantelon
And think of the data they can mine by having full access to your Internet
usage.

~~~
jrockway
Please read the privacy policy before spreading misinformation:

<https://fiber.google.com/legal/privacy.html>

~~~
mcantelon
Please don't pretend that privacy policies are carved in stone:

[http://arstechnica.com/tech-policy/2012/03/googles-new-
priva...](http://arstechnica.com/tech-policy/2012/03/googles-new-privacy-
policy-what-has-changed-and-what-you-can-do-about-it/)

------
barista
It would seem odd if there were multiple utility companies offering to provide
the service and Google got an unfair advantage. If nobody else was offering
anything then what is wrong with a government agency working with private
company to provide service that is helping people?

