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Nationwide Google Fiber Deployment Would Cost $140 Billion
An anonymous reader writes "For a lot of U.S. internet users, Google Fiber sounds too good to be true — 1Gbps speeds for prices similar to much slower plans from current providers. Google is testing the service now in Kansas City, but what would it take for them to roll it out to the rest of the country? Well, according to a new report from Goldman Sachs, the price tag would be over $140 billion. Not even Google has that kind of cash laying around. From the report: '... if Google devoted 25% of its $4.5bn annual capex to this project, it could equip 830K homes per year, or 0.7% of US households. As such, even a 50mn household build out, which would represent less than half of all U.S. homes, could cost as much as $70bn. We note that Jason Armstrong estimates Verizon has spent roughly $15bn to date building out its FiOS fiber network covering an area of approximately 17mn homes.' Meanwhile, ISPs like Time Warner aren't sure the demand exists for 1Gbps internet, so it's unlikely they'll leap to invest in their own build-out."
I guess it's time for all of us to tell our power utility that fiber is essential infrastructure. They need to standardize on the Google Method and wire our streets so that they're ready when Google comes here. Otherwise this is going to take too long.
First communities to make it a downhill run for Google win the digital economy.
Almost the whole world wants Google fiber.
And if they won't do it - maybe they'll show us how we can do it for ourselves.
Help stamp out iliturcy.
I'm sure the 80/20 rule applies - for instance when rolling out in densely populated areas. So for less then $30 billion (still a lot of money though) 80% rollout might be achieved.
In a country of 300M people, $140B is only $50 per person. Comparing the price to Google's market cap is silly. For a big infrastructure project like this they would, of course, seek new capital to cover the cost. This is affordable.
Apple's got the cash. What would it take for them to get in on the game?
Remember kids, if you're not paying for the service, YOU ARE THE PRODUCT THAT IS BEING SOLD.
Well, according to a new report from Goldman Sachs, the price tag would be over $140 billion. Not even Google has that kind of cash laying around.
Apple could, they have $120 billion in cash. Maybe that is what they are saving up for ... becoming a national ISP. :-)
At $14B/yr the US Government could easily handle that. And should.
GS is invested in gov regulated businesses, Google is disrupting them, laying fiber is or should be cheap, this looks like another bluff and misdirection.
Going by $720M / day, that's less than 200 days of the war in Iraq.
http://costofwar.com/ I can think of a few hundred thousand reasons in afghanistan for why we should do this now and bring the troops home or end the drug war, your choice
If every Slashdot user had a Gig connection - all it would do is bring the site down. Throttling the last mile is an important part of keeping the content providers alive and online.
I want to delete my account but Slashdot doesn't allow it.
..."Meanwhile, ISPs like Time Warner aren't sure the demand exists for 1Gbps internet,"
At current costs? Of course not. People would *love* to have more speed. But not if it's going to cost $100+ a month to get it like TWC/Cox/Comcast/etc. would charge for it. They create their own stagnation with greed.
$140B doesn't really seem that bad. I'm sure the cost to get running water, the interstates, or plenty of other public works projects would cost more than that, in today's figures.
Verizon spent $200b + on their network, so why don't we compare the cost to that figure?
In a country of 300M people, $140B is only $50 per person. Comparing the price to Google's market cap is silly. For a big infrastructure project like this they would, of course, seek new capital to cover the cost. This is affordable.
I think this can't be stressed enough.
If the numbers in this report are anywhere near accurate, it ought to be easily possible to get a national fiber network. (Financially possible; saying nothing about politically here.)
Furthermore, it highlights just how dishonest and greedy Verizon is being in their decision to stop rolling out fiber. The primary reason they are doing it is to push more people onto 4G wireless—which they can charge much more for, and which is much less regulated than any wireline service. (I can't speak to what AT&T is doing, since to my knowledge, they don't have any wireline deployment in my general area.)
This sounds like the perfect target for some kind of grassroots push. If we can get some of the tech giants, like Google and Apple, on board, it ought to be possible to counterbalance the ISP lobby.
Dan Aris
Fun. Free. Online. RPG. BattleMaster.
But Goldman Sachs sure as hell does. Let's make them cough up some of that bailout money for something useful for a change.
“He’s not deformed, he’s just drunk!”
The only way to understand the true value of that kind of speed is to use my preferred bandwidth measure: Nipples Per Second.
So we can bailout Wall St. and the banks to the tune of hundreds of billions, but we can't afford to invest in infrastructure. Good to know.
$140,000,000,000 / 300,000,000 people = $467/person. But if you go by households you're going to have to pay at least $1,000 each.
Should it be $1000/month or $975 with the "Triple Play".
What did we get for spending $4,000 billion chasing imaginary WMD in the middle east? Only a fraction of that (3.5%) would have given every American a peice of the future... So sad
The milirary budjet for 2011 for the US military was: 683.7 billion
140 billion is a lot, but it's not like it'd be a recurring cost like the US military, after the construction, the subscribers would pay for the upkeep.
But I think it'll never happen, certain cable companies are happy to cash in on american income.
Apple Fiber would be a fucking nightmare. Imagine: all of the Internet that Apple allowed you to see!
I don't respond to AC's.
They don't need to have that much cash on hand. Deploy in select markets, start raking in profit, reinvest profits to increase market share. This is basic 'How To Run A Business'.
$140 billion is 66 weeks in Afghanistan, according to costofwar.com.
rate = 3.51199622774 #per ms
fiber = 140000000000
day = rate * 1000 * 60 * 60 * 24
fiber / day
=> 461.3815805300829
week = 7 * day
fiber / week
=> 65.91165436144041
Colin Dean Go a year without DRM
A mere fraction of the annual defense budget :(
I KUT J00 M4NG!!!
"ISPs like Time Warner aren't sure the demand exists for 1Gbps internet, so it's unlikely they'll leap to invest in their own build-out."
The (the big players) will however leap to the effort to squelch it. If Google wants to make this happen which would change the landscape they are going to just have to do it and drag everyone kicking and screaming. As well as give their lawyers something to do.
Obviously Google is not going to set out to equip every home in the USA. They will string their fiber along major corridors, connecting big cities first.
They may also buy some of the dark fiber optic cabling that is currently largely unused, which already connects to most places in the USA.
Anyway, Goldman Sachs, the company that assfucked the entire USA, should not be trusted or dealt with. Shun them.
Google has the brains of a jackass in sinking that kind of money into something like this after Obama was re-elected. This economy, as well as our and Europe's currency, is on the ropes and such endeavors will amount to throwing money to the wind. No one will be able to afford thw web at any price.
The Telcos need to get building what they promised.
Be seeing you...
The cost to the United States of the Afghan and Iraq wars in 2011 was $160 billion. A further $120 billion will be incurred this year.
For myself, I'd be happy with a solid 20 megabit connection. What I really want is:
Which means gigabit or better to the local distribution point, and neighborhood infrastructure that can handle the aggregate bandwidth. Most of the problems I have aren't my individual connection's bandwidth, it's the shared local infrastructure between my home's connection point and the ISP that's insufficient for the bandwidth of all the connected subscribers. Fix that and give me symmetric bandwidth and I'll be a happy camper.
All it'll do is cause you to hit your download cap in an hour or two.
I certainly wouldn't pay extra for it nor would anyone I know. I'd much rather pay less for the 1.5Mb I'm getting. If I had more money I'd pay a little more than I am now for 10Mb but I have no use for anything faster.
Warning: this article may contain humor, sarcasm, parody, and perhaps even irony. Read at your own risk.
It's cheaper!!!!
If Apple promised to use it to build a nationwide fiber network, I'm sure congress would pass a bill to allow them to repatriate it tax-free.
It sounds like want to justify their current business model is valid high price low bandwidth. And to convince the public that is true too. I see raw bandwidth replacing individual services in the distant future. But the snippet above sounds like oh people would never need to talk and use data on their cell phone at the same time it just won't happen. (verizon)
That was imaginary money. It was just numbers moving around in computers. If you're talking about building infrastructure, you're talking about expending man-hours and equipment, that's real money.
Yes, but the Iraq war benefits the bankers, globalists, and components of the military-industrial-media complex. Nationwide gigabit fiber would chiefly benefit the citizenry and small businesses. So, the Legislators simply can't vote for such a thing!
There's no bad way to spend $140 B (or more). A lot goes into the pockets of workers who dig trenches and string fiber. (We really need those jobs.) Some goes to electronics manufacturers, but it all stimulates the economy -- and serves somebody's interests. The problem is if AT&T, Verizon, et. al. are locked out, especially if it's a government investment.
As economic stimulus goes, I think I'd rather have bridges that don't fall down and railways that work than 1 Gbps to my home. A mere 100 Mbs should keep me happy for the next 5 years, I'm thinking. I making do with 18 at the moment.
Fiat Lux.
At $1000 per installation, they would get about $120B for 120M households; close enough to start. I would gladly pay a $1000 start-up fee for symmetrical 1Gbps/service. From other reports, Google is charging $70/month, with an operating cost of $5/month. As the early adopters start to accumulate, the revenue stream will offset the cost for the periodically lowered installation charge to increase penetration.
Establish a nation-wide signup. Require a credit card (Google Wallet) for signup; they won't be charged, but they'll separate the wheat from the chaff. Crunch the data to find the highest population density signups and start build-out in those areas. Provide near-realtime online updates on build-out area priority. This lets those interested in an area act as promoters / ambassadors to increase signups, and raise their area's priority. Like the first cities selected, let people compete - providing free word of mouth advertising in the process.
And don't forget the other side of the equation; offer servers reasonably priced 100Gb local Google data center / site interconnects to keep the on-net customers interested and happy.
Can You Say Linux? I Knew That You Could.
I can't even get dsl speeds at home, so let's start with getting everyone SOME form of high speed before jumping to a link no reasonable individual could saturate.
could begin? Google, as a company, has always had a decent reputation. What if a grass roots organization could organize support among the 311 million people to fund some of this. Instead of 'hoping' that Google comes to you - make it happen. Google would make good bank; but in return they would agree to charge so much. Kind of a business - community arrangement. Kept above board, this could benefit generations to come. In short, leave the government out - make the agreement beneficial to them, beneficial to joe schmo, & reap the rewards that we, as an advancing civilization, are supposed to.
Google has $45 billion, not $4.5 billion, in cash and short-term investments. With only $6 billion in debt. As of their September financials. Their operating cash flow is about $1 billion a month. They are a really big company, and they have the means to make this work.
Help stamp out iliturcy.
I can confirm that the company does not believe there is demand for fast, reliable internet connections. This is true, at least, where only Time Warner is the only available broadband.
That way you make money as you go. You get repaid by each installation sold. Yes, it costs money to operate them, but you charge a little extra. You don't plop down $140B in one lump sum.
The telcos are slowly strangling the internet... from bandwidth caps, to non-compete agreements with the cable companies, from AUPs that prohibit servers, blocked ports/protocols, to a complete refusal to roll out fiber even in dense urban areas.
Google, Apple, Microsoft, Amazon, Netflix, etc should each pony up some cash and begin a nationwide deployment right now. Not with an eye toward making a huge profit, but to ensure they continue to have access to their customers without toll-booths being setup inbetween because you can rest-assured that is exactly where the Telco/CableCo dualopoly is moving us.
This is a matter of long-term survival and they need to act now.
Same reason they should be buying their own media companies, before Big Content buys enough of Congress to make YouTube illegal and slaps a 100% tax on all flash memory.
The RIAA, MPAA, Telcos, and CableCos aren't necessary. It's time to eliminate them but the window on that is closing - soon they'll have too much influence to be assailable and we'll be in the Gilded Age 2.0, stuck for years until a massive depression finally loosens their grip on power.
Natural != (nontoxic || beneficial)
I'm probably the only person on /. who thinks that the internet is kind of boring lately, and it would be better to focus on getting everyone access to affordable broadband instead of really-really-ridiculously-fast internet for a handful of geeks.
"I assumed blithely that there were no elves out there in the darkness"
Gigabit fiber to the home is quietly being deployed by Sonic.net in Sebastpol, CA. It costs them about $1500 per drop, but they gain back the $20 per month they were previously paying to AT&T for access to copper. Customers pay $70/month for 1Gb/s Internet connections. 20Mb/s for $40. Sonic makes money on this, and is slowly expanding the service.
The big players in cable hate Sonic, one of the last of the independent ISPs. Network neutral, EFF-endorsed privacy policies, no caching or "deep packet inspection". Just bits.
Sonic isn't in the TV business. (They do resell DirecTV if you want that, but that comes in via a dish, not the Internet connection.) So they don't have any bias towards sending their own content.
Regulate Google.net as they did Ma Bell in the 80s. They don't need to be reading ALL SMTP traffic that flows across the network.
However, if Google (or any other company that has the capability) wants to step up and do a national 1Gbps fibre rollout, pay for it out of that Spanish-American War-era superfund. Federal Universal Service Fund. FUSF! ... and this sounds like universal service to me :)
They have the money
Countries like Sweden have been doing it for years at a much lower rate and they are way less populated than the US.
How did we get phones and cable practically nationwide? How did we get electricity and water and sewage nationwide? Those are much more expensive investments than just blowing a fiber through a pipe. And fiber is already nationwide, there are fibers crossing the country in multiple directions, heck most phone companies have fiber in each street already.
It doesn't mean you have to have fiber to every house. The existing copper will do just fine for the last couple of miles, you can get gigabit speeds on it already, the companies simply don't want to invest in the uplink and rather hoard the profits as they have been doing over the last couple of decades.
Custom electronics and digital signage for your business: www.evcircuits.com
If the only thing it accomplishes is to piss off Republicans, then it's well worth it.
now we need to go OSS in diesel cars
As I've said in prior posts, telecom dividends are evil. AT&T pays a 6% dividend, and Centurytel pays a 7.4% dividend. Dividend payments cause the telecom companies to put off upgrading infrastructure as long as possible because of the cost of the dividend payout. If dividends were unlawful or heavily taxed for telecom companies, you'd see the incentives change for the better: More overbuilds and therefore more competition which would drive the upgrade of the cable plant.
Additionally, those companies paying high dividends also treat their customers badly since they have a defacto monopoly or duopoly, and thier primary purpose of existance is to ensure management is overpaid, then pay out highest quarterly dividend possible. This is a perverse incentive. Corporations need to have balanced corporate charters which balance the need for profit against the needs of other stakeholders such as customers and employees.Persuing short term profits and quarterly results versus delighting your customers is one of the things which has ruined this country.
Google wouldn't want to build a nationwide network. They are going to pick out the locations where there is a high demand for the service in small areas in order to get the most customers for the minimum installation costs. There's no way there are going to build fibre networks out in the country where the houses are kilometres apart. Their ideal clients right now are dense suburbs and apartment buildings in well off areas.
I guess it's time for all of us to tell our power utility that fiber is essential infrastructure.
I told them, they said not to worry, and hooked me up.
Anybody want to decry the evils of municipal broadband?
I have the Verizon fiber service with 25Mbps UP and down, but it seems difficult to benefit from because most of the web services I deal with are so slow. Which popular web servers (and the connections that support them) can actually provide significant time savings to those who have such fast service?
If Google built the inter-city fiber network and terminated it at a city-wide co-op type provider it would offload the build out costs over many more people. For that matter, hi speed wireless for the city tapped into the national fiber would make it even cheaper.
Didn't we (U.S. Tax payers) give $200B to ATT and Verizon (GTE maybe) back in the late 90s to put fiber everywhere within 10-Years (for 45/45 down/up speeds) and got nothing except -$200B Wasted in the end with a "it can't be done response"?
Maybe we should collect it back and give the contract to someone who can actually get the job done.
But not at the cost and caps that a normal ISP would impose.
---- Booth was a patriot ----
Not to have this kind of infrastructure?
"To those who are overly cautious, everything is impossible. "
Wouldn't it make sense to get the big cities/metropolitan areas first, that way you corner the market while forcing the telcos out and having them concentrate on rural areas to make money. Then you swoop in the kill that market
OR come to Canada first and stop the mass rape that is called internet here.
One things that I'd be wearing about is the same thing that is happening now. Content distributors running the internet networks. No conflict of interest there or nothing like that.
by TheSpoom (715771) Uncaring Linux user here. I have nothing to add to this but please continue. *munches popcorn*
Along the Wasatch Front we have the excellent UTOPIA project, which brings fiber to the home. The fiber infrastructure is treated like a utility and any ISP can compete for your business - Keeping costs down. It was a great day when I had my symmetric 100 MB connection installed and was able to say goodbye to Comcast.
This could be funded by State government contracts.
At $1000 per installation, they would get about $120B for 120M households; close enough to start. I would gladly pay a $1000 start-up fee for symmetrical 1Gbps/service. From other reports, Google is charging $70/month, with an operating cost of $5/month. As the early adopters start to accumulate, the revenue stream will offset the cost for the periodically lowered installation charge to increase penetration.
Establish a nation-wide signup. Require a credit card (Google Wallet) for signup; they won't be charged, but they'll separate the wheat from the chaff. Crunch the data to find the highest population density signups and start build-out in those areas. Provide near-realtime online updates on build-out area priority. This lets those interested in an area act as promoters / ambassadors to increase signups, and raise their area's priority. Like the first cities selected, let people compete - providing free word of mouth advertising in the process.
And don't forget the other side of the equation; offer servers reasonably priced 100Gb local Google data center / site interconnects to keep the on-net customers interested and happy.
How would most of us get $1000?
Fiber to every home, Bridges and roads in good repair, A national water grid, A balanced budget, And that's just getting the list started...
What about all of the undeveloped "dark fibre" we've read about for years that exists in this country? When you write of capital expenditures that companies like Verizon have made, aren't you including the vast government subsidies these companies were provided to execute a fibre build-out? All that money was spent without benefit to the public.
Furthermore, I can well imagine it would be terribly expensive to bring 1 Gbps to every household in the U.S., so what's the cost of bring 1Gbps to the cheapest 90% of the country to reach?
I think demand is there for anyone who wants to host a site or run a business.
The Fed could issue Google $150B in 50 year 1% bonds (3 year interest deferral) and use the revenue to pay for it. Muni or revenue bonds are common for states and counties, but being a critical infrastructure need, this could easily be justified federally. I would sign up immediately for 5 properties.
You would have to import installers from all over the world to accomplish it.
JJ
It eventually will be, you'll just have to wait longer. $500 isn't reasonable if it costs $1000 to install, which it does.
Can You Say Linux? I Knew That You Could.
Obama spent about 8 times that much in just one year (in addition to that year's budget) as so-called "stimulus". No President in US history was every allowed to spend that much... and we have NOTHING to show for it. If he had funded it as a piece of national infrastructure (with Google as a contractor) the resulting wave of economic activity would have been fantastic and we would all have gotten a tangible resource that would have lasted, and served us, for YEARS
Instead, he spent billions on a bunch of non-viable tech start-ups with bad business plans run by his campaign backers, (many of which went belly-up while their investors made-off with the cash) and he spent much of the rest subsidizing state and local governments who were able to keep surplus (as-in people their base-line budgets could not maintain) unionized government workers on the job. After the stimulus expired, many of them went on to lose those jobs anyway... so no long-term benefit to the taxpayers of the future who will be paying interest on that new debt for decades to come
If I had to choose, I'd prefer Google to launch a Nationwide wireless competitor. I can't tell you how sick I am of AT&T.
Doesn't Tiawan have gigabit speed ISPs?
Sorry that was Hong Kong... http://www.tvover.net/Hong+Kong+Offers+1+Gigabit+Residential+Internet+Access.aspx
Not even Google has that kind of cash laying around
laying: the act of being placed upon a surface. The hens is laying eggs
lying: resting in a place or upon a surface. I had $100 lying around so I bought a dictionary
If you were writing code you'd take care to write the correct keywords. So why be so lazy when communicating with humans?
Google and Apple should kiss and make up, form a joint venture to roll out Google Fiber nationwide as a showcase of their products.
It seems that just five persons' Google Fiber upload bandwidth is far more than enough to saturate every TWC and Comcast download cap in the US. All of KC Google fiber is overkill by thousands of times.
Help stamp out iliturcy.
The last thing Big Media wants is even faster downloads of movies. They've pushed hard to make sure data caps are in place to mitigate it all, so there's no way they'll let this fly.
At first glance your argument appears valid. But even high population areas suck in comparison to other countries. If it was just rural areas and small cities that had bad Internet I would agree with you. However take any of the major metro US markets and compare to any similar major metro markets in other top countries and you'll see the US is vastly underserved by our telco / cable duopoly.
My local congress critter was sitting house chair of the House subcommittee on telecommunications. His entire plan for increased internet presence was given to him by major telcos - roll back the '96 deregulation act that forced competition and they promise they'll make things faster. Telcos were some of his largest campaign donors. That got rolled back, the promises didn't materialize, and the congressman went on to the more powerful Energy subcommittee. Ahh politics!
How do you figure its inflated? There is much more to the US than the East Coast and major metropolitan areas. I got relatives who live out in little towns in Central and West Texas, and some in North Texas - one town has 300 people, is an hour from the closest town of 20,000 people, and 3 hours from a major city. The only broadband they can get in the area is 1.5Mbps DSL, and that is if you live in the CITY - most of those 300 people are ranchers, and they are stuck with dialup or HughesNet. Another piece of myfamily lives in a city of about 1200, mostly ranchers and farmers, and even in the city, if you want broadand, you are stuck with satelite. They are an hour from the closest city of 100,000 people, and 3 hours from a major city. I got family out in North Texas in a town of about 300, which is so spread out and so rural, that they don't even have addresses - they drive into town to the post office to get their mail as there is no mail delivery in this town. They are 10 miles from the closest town of 5,000 people, and an hour and a half from Dallas. They all have HughesNet
How much do yoou think it is going to cost to run fiber out to these rural areas?There is a reason that no one - not AT&T, not Time Warner, no one, has run fiber out into these areas. There is a reason you can't get cable or DSL out there. It's not cost effective.
Most of the US is rural areas. Get out of the major cities and actually see the country. Drive through Kansas, New Mexico, Arizona, Nevada, Colorado, Oklahoma, Wyoming, Montana, etc. It is RURAL! 20,000 is considered to be a large town in many of these areas.Shoot, you have entire states out there that have a lower population than many of your East-Coast cities.
And then, what about trying to lay fiber out in the mountains? What about trying to cover Alaska?
I actually think $140 Billion is pretty conservative. I would have thought it would be much higher.
This report measures the wrong thing. If GF is profitable purely by itself (no accounting tricks, no assumptions about how much additional ad revenue could be generated, as son on), then the investment would be justifiable no matter the cost.
Also, since Google has released zero actual cost numbers, this is making guesses based on how Time Warner or other highly inefficient companies operate. Why do that?
is companies exist that WANT to do things with high speed internet. They CAN'T because the infrastructure is not there. For example, the Kickstarter project Planetary Annihilation is a game based around a client-server model. Their biggest sufferance is that the game is ultimately limited by a home user's bandwidth. They're a relatively small company that has no chance of bringing fiber to every home in the country, never mind even entering the business. They are, in effect, entirely dependent on a larger company to build the supporting infrastructure.
The people who CAN build infrastructure are also the people we DEPEND on to build infrastructure. If they don't, everyone gets screwed.
While I would love to see faster internet infrastructure being built, I'd just like to see current broadband(cable) services being extended.
There's huge gaps in coverage and insofar the only solutions for people in rural areas are cell carriers or satellite, both of which are substandard and useless for online gaming. Cell carriers put ridiculous caps on their service and the speeds just don't cut it. Same goes for satellite ON TOP of orbital distance lag times...
I see the fate of rural customers not changing for some time. Those in service areas anticipate new technology while rural residents are just waiting for the decade old tech to reach their corner of the world....
I already have 1/1 Gbit fibre. I don't need google for that. The US needs to stop getting bumf*cked by telco's. Bandwith caps, carrier locked cell phones, etc. just sucks.
I can easily see them try to 'kickstart' the project to raise funds for each area.
This is why we have governments. They are able and have the mandate to do things that corporations are incapable of doing or don't have the motivation to do or as in this case, both. This is how we got the national highway system ion the first place. I would say that private business and the nation as a whole has benefited from having a highway system and that the money spent has been paid back many many many many many times over since it was created.
...because ISPs like Time Warner, Mediacom, and Windstream would lose their precious, money-making monopolies in areas like mine!
A competitor in my area that offers cheaper service and exponentially better customer service with even better quality of product? Heaven forbid!
Seems Frontier never wanted FIOS when they purchased Verizon's rural copper business...Why not sell the whole thing to Google :-)