I worked briefly on the Fiber team when it was very young (basically from 2 weeks before to 2 weeks after launch - I was on loan from Search specifically so that they could hit their launch goals). The bottleneck when I was there were local government regulations, and in fact Kansas City was chosen because it had a unified city/county/utility regulatory authority that was very favorable to Google. To lay fiber to the home, you either need right-of-ways on the utility poles (which are owned by Google's competitors) or you need permission to dig up streets (which requires a mess of permitting from the city government). In either case, the cable & phone companies were in very tight with local regulators, and so you had hostile gatekeepers whose approval you absolutely needed.
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.
It's very interesting that you say the biggest hurdle was regulatory capture, that is certainly depressing.
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?
I'm not sure, exactly - most of the discussions about whether Fiber would be viable happened long before I was on the team, and in any case I wasn't privy to them. Here is Milo Medin's (Google Fiber's "founder") testimony before the House Oversight Committee on regulatory issues in ISPs:
Calling the disputes over utility poles in KC "regulatory capture" is quite a bit of historical revisionism. This ArsTechnica article does a good job of explaining what the dispute was about: http://arstechnica.com/tech-policy/2013/12/why-att-says-it-c....
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.")
My bias in this thread is pretty obvious, but to me, that ArsTechnica article doesn't make AT&T look any better. Their response was basically "Here, you want to be a telecom? Go clear all these regulatory hurdles that we've already done", without at all addressing whether those regulations are worth having in the first place. That's almost the definition of regulatory capture: when regulations exist to create barriers to competitors rather than to protect the public interest.
I think it's actually the opposite of "regulatory capture." It's not about the incumbent getting special treatment, but making sure a new entrant doesn't get special treatment.
If the regulations only serve to protect incumbents by raising the barriers to entry, ignoring whether this is the case here, rather than the public interest, isn't it still valid to argue that this is regulatory capture? I'm genuinely curious here and not trying to be obnoxiously argumentative.
Yes, that's a literal textbook example of regulatory capture.
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.
Before claiming "regulatory capture" don't you have to make some facial showing that the regulations only exist to protect incumbents? The regulations at issue are Title II, which everyone here loves.
A lot of those pictures seem to be due to limitations in the technology they were using, not limitations of regulation... however, to address your question- if society decided to grant someone a monopoly, it should be to the government, not a private entity. So, for example, if society decided we only wanted one set of fiber cables ran throughout the city, they would decide that the city would run them, and then lease access (using VLANS or similar tech) to any service provider that wants to use them.
You know, returning home to the USA a couple times a year, I am really struck by how many freaking power and phone lines are everywhere. It seems like every single street, except for the very core of cities downtown, and only the very wealthiest neighbors, have buried lines. In Germany, almost every town and every highway is free of these (IMO) ugly poles with lines everywhere. It's really an eyesore when you finally glance up.
I hear this argument a lot and it doesn't really hold water. Essentially every little town, village, city, even along highways, everywhere in Germany, the cables are buried. Even in low density towns. Even to farms out in the country. Pretty much the only things that aren't buried are high-tension lines.
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.
My mother-in-law has a cabin in northern Minnesota. It's three miles outside a town of 150 people. Her utility lines are buried. Meanwhile, I live four miles from the center of a metro area of three million and everything in my neighborhood is above ground.
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.
> "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."
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...
The box wouldn't be WiFi. That doesn't have enough bandwidth for the target results. It would be a wire or optical fiber, and it probably won't be a continuous stream of direct neighbors: people would run it across the street through storm sewers, string it up on utility poles, bury it an inch deep across the local park or unknowing intermediate neighbors, or even renting a trencher or pipe layer and installing it like a utility would... However they can get it. The data finds a way. Legally, those require permits.
And that's _exactly_ why Google didn't go that route! I'm all in favor of sticking it to Comcast/Time Warner/whomever, but I very much do _not_ want my neighbors taking it upon themselves to try and run homebrew fiber through the city park by my house, or under my backyard without my knowledge or permission. If I owned utility poles, I would presumably have some opinions about people climbing up to install their own cables, and if I didn't, I'm sure that whoever I buy liability insurance from would!
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.
> 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.
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.
Wouldn't surprise me if there are some local regulations about how wires or cabling can be run and who can do the installation, but I'm not aware of any specific laws.
I don't understand a few things about Google fiber ever as a long term viable business unit inside Alphabet as a whole. As you mentioned in the thread, and I agree with the sentiment, Access succeeds by forcing others to take action. For example, bidding on wireless spectrum for get open access.
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
1) Anti-poaching
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?
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.