The technology was awesome (1G Internet and HDTV!), the software all worked great, and the economics of hiring contractors to lay the fiber itself actually worked out. The big problem was regulatory capture.
With Uber & AirBnB's success in hindsight, I'd say that the way to crack the ISP business is to provide your customers with the tools to break the law en masse. For example, you could imagine an ISP startup that basically says "Here's a box, a wire, and a map of other customers' locations. Plug into their jack, and if you can convince others to plug into yours, we'll give you a discount on your monthly bill based on how many you sign up." But Google in general is not willing to break laws - they'll go right up to the boundary of what the law allows, but if a regulatory agency says "No, you can't do that", they won't do it rather than fight the agency.
Indeed, Fiber is being phased out in favor of Google's acquisition of WebPass, which does basically exactly that but with wireless instead of fiber. WebPass only requires the building owner's consent, and leaves the city out of it.
This leads me to another question that maybe you or someone else can answer, although I understand if you can't for various reasons. There seems to be a ton of very smart people working at Google and I can't imagine that they would go about trying to set up their own ISP without taking into account the huge pushback they would get from existing telcos, so I would imagine they had plans to deal with all of this. Did Google underestimate the amount of pushback they would receive, did they feel they could effectively lobby for changes which turned out to be unsuccessful? Or has something else changed in the proceeding years since Fiber originally rolled out that makes Google think it is no longer worth the fight?
(From Apr 2011, over a year before Google Fiber actually launched.)
Also, Google got very preferential treatment when it came to pole access in Kansas City: http://www.wsj.com/articles/SB100008723963904438626045780306... ("The cities are discounting other services, as well. For the right to attach its cables to city utility poles, Google is paying Kansas City, Kan., only $10 per pole per year—compared with the $18.95 Time Warner Cable pays. Both cities have also waived permit and inspection fees for Google.")
There are many other examples of rent-seeking. One of the most common ways of using government to eliminate competition is what is referred to as "regulatory capture." This is the case where regulators end up acting in ways that benefit the industries that they regulate. Many government agencies are generally created with the high-minded notion of protecting the public from rapacious behavior of corporations. However, these corporations can use the government agencies to protect themselves from competition, most frequently by encouraging a set of regulations that makes it very difficult for newcomers to enter an industry. They use the creation of regulations as a barrier to entry.
Why is that depressing? Do you feel any company should be allowed to build a phone line above your street, instead of being a regulated monopoly?
This is what happens when you do that:
Aboveground cables are easier to repair and much less expensive to string up over thousands of miles.
Lines exposed to the elements wear faster than buried lines and are subject to more outages due to weather and accidents.
It's just that in the USA towns and cities are either too disorganized or too cheap to invest properly in infrastructure. Burying lines seems like such a small thing until you realize how ugly lines strung everywhere are. It makes me feel like I am coming home to a third world country sometimes.
I suspect the major difference is that the power and phone companies in the little town are customer-owned coops while the utilities in my metro area are huge conglomerates.
How would that break any laws? It's essentially doing a commercial mesh-net of sorts, like many are already doing in Europe and elsewhere.
If instead, they gave you a box and a map - and that box supported wifi - then a mesh network or something would be feasible. Wired could be done by running the wires along the fence or trenching inside the property line (neighbor to neighbor - if your neighbor is willing).
Otherwise, point-to-point mesh wifi (or maybe even free-space optical - like the Ronja system).
Not sure where any of that would be illegal as long as no other carrier's TOS was infringed or such...
Look, there are reasons why cities have permitting processes. Those reasons sometimes do include regulatory capture, etc., but generally they have to do with making it possible for large numbers of people to make productive and stable use of shared resources and infrastructure in an organized manner. I'll be the first one to agree that some permitting processes in some areas are imperfect, but that's not a reason to ignore them whole-hog.
I believe—depending on the municipality—if you knowingly and explicitly share internet with others you open yourself up to the sorts of regulation ISPs have to deal with.
But does Google really want to be the one left holding the hot potato in situation like this? Does Google have any success/relevant experience in running a business like a residential ISP? Even established telcos like Verizon can't grow wireline very much.
You mention AirBnB and Uber as successes but those legal battles aren't over yet, with examples such as Austin/Uber and NY/AirBnB just recently. Also I think the value provided by Uber/AirBnB is much larger then Google fiber, which is to serve like 6 US cities with marginally faster internet that most websites can't even take advantage of.
Also I find your statement "they'll go right up to the boundary of what the law allows" as disingenuously painting Google as helpless & innocent. Google has gone to court for a variety of things they felt were worth it for their business
2) Google books scanning
3) Youtube copyright
4) Oracle Java
Whether or not you believe they were in the right or the wrong, they are a massive multinational corporation who are capable of arguing for their business interests in court. Whether Fiber was ever important enough for Google as a long term real business unit is what I question. They put 4.5 billion on the line for spectrum open access, I don't see the same time of commitment applied to Fiber at all.
Basically what I'm asking what was the successful longterm outcome for fiber if not a quiet drawdown like this? For Google to really be a large US ISP?