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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."

22 of 327 comments (clear)

  1. Time for some grass roots activism by symbolset · · Score: 5, Insightful

    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.

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    1. Re:Time for some grass roots activism by symbolset · · Score: 5, Informative

      Property values are up. Jobs are up. KC is in the national spotlight in a good way. Every local official that got behind this is a local hero who just amplified his political opportunities. Those folks are assured reelection in perpetuity. They didn't have to be bribed to let Google hang fiber: they had to beg Google to come hang the fiber. They were changing the honorary name of the city to "Google". They were promising the name of every first-born son...

      Seeing how this is working out, Google won't lack for cities to beg them to come hang fiber for quite some time.

      Over 1,000 cities competed for the opportunity to be first. And over 1,000 cities were disappointed to lose the chance.

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    2. Re:Time for some grass roots activism by neokushan · · Score: 4, Interesting

      This is the part that I'm pretty sure Goldman Sachs hasn't accounted for. That whole "could cost up to $140Bn" thing sounds very inflated.

      Look at it this way. According to them, if Google spends 1/4 of its $4.5Bn it could equip 0.83million homes. That's $1.125Bn for 0.83million homes.
      On the other hand, Verizon has spent $15bn and equipped 17million homes. For google to pass 17million homes, using the above calculations, it would cost them $25bn. Those numbers don't make a lot of sense to me.

      Now factor in the above - that cities are clamouring for Google to come there and are willing to give them as much help, tax breaks and discounts as possible to encourage it and that $140Bn could potentially halve, or at the very least drop by 1/3. Still expensive for Google to network the entire country, but they only have to hit a small portion of it before the other cable companies feel the pressure and start rolling out their own fibre.

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    3. Re:Time for some grass roots activism by Enderandrew · · Score: 4, Informative

      Google was charging $300 per house for the installation, or waiving that if you pay for a two-year contract.

      It does cost Google a lot to build out the infrastructure, but they'll pass some of that cost on to consumers to make it viable.

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    4. Re:Time for some grass roots activism by Pseudonym+Authority · · Score: 4, Informative

      1GBps Wireless, 1GB Cap, finish your month in 1 second.

      B-b-but that would take 8 seconds!

  2. $140B = $50 / person by ShanghaiBill · · Score: 5, Insightful

    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.

    1. Re:$140B = $50 / person by kramulous · · Score: 5, Informative

      It is more like $500. Still ridiculously cheap.

      Only governments can do this sort of thing properly. Pity Americans don't trust their government.

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    2. Re:$140B = $50 / person by NFN_NLN · · Score: 5, Funny

      It is more like $500. Still ridiculously cheap.

      Only governments can do this sort of thing properly. Pity Americans don't trust their government.

      1Gbps fiber to the house is a waste when you consider the options:

      For $140B we could exactly bail out the banks after screwing us yet again.
      We could extend the war in Afghanistan another 3 years.
      Or you could also extend the "war on drugs" another 4 years!

    3. Re:$140B = $50 / person by cdrguru · · Score: 4, Insightful

      Americans keep getting slapped in the face with proof after proof that their government cannot be trusted with simple things, like taking out the garbage. Why would be be foolish enough to trust the government with (a) something worth lots of money - that could be stolen or corrupted and (b) something really complicated?

      Most likely, a government "Internet for the people" project would be decided that it simultaneously could not present information about gay sex activities and be required to present information about gay sex activities. Obviously when something is both mandatory and prohibited this schizophrenia will seep into everything. If you could get a road map, it would have to be in the public domain from 1925 or earlier. If it were possible to display information about religious events, it would do so only for an obscure sect of aboriginal head hunters that worship the two dollar bills they found in 1880 - only this would pass the censorship filters. Of course it would have to be both government funded and ad supported with an annual lottery to determine what company was to receive the hundreds of billions in ad revenue. Of course when the only winner every year was found to be owned by the Speaker of the House or the Senate Majority Leader hearings would be held and the same company selected the following year.

      Trust us, no American with any sense wants the government involved in delivery of Internet services in any way, shape or form.

    4. Re:$140B = $50 / person by mellon · · Score: 4, Insightful

      Then why have the telcos and cable companies spent so much money preventing it from happening? To get it outlawed in every major market? If it's impossible for government to do it, then surely all of that lobbying and all those laws were an unnecessary waste of time.

      No, in reality, it's better to lay fiber once to every house and then sell transit on the fiber to ISPs. That's something that a city government can do quite effectively. The reason it hasn't been done is that it would create competition, and ISPs don't want competition. They want to own the market. In my town it's Comcast or nothing. Nothing personal against Comcast, but I'm paying a lot for fairly crappy connectivity. If I had a choice, I'd take it.

    5. Re:$140B = $50 / person by mellon · · Score: 5, Informative

      You might want to read this article. This is an article about what happens when private industry takes money from people to built faster broadband infrastructure. Executive summary: they pocket the money, and don't build the infrastructure.

      It may be that government would do the same, but this is an unsubstantiated assertion on your part. How's about you provide some citations to support your claim? Because as far as I know, there have been a lot of successes with municipal broadband, and very few failures (indeed, I know of only one).

  3. I find this statement amusing... by Red_Chaos1 · · Score: 5, Insightful

    ..."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.

    1. Re:I find this statement amusing... by symbolset · · Score: 4, Insightful

      Incumbent internet providers are still trying to sell us the notion that bandwidth is a precious resource that has to be metered and capped per user, or the greedy few will saturate their networks depriving the rest of us of our Netflix. Google's gigabit fiber is not filtered, metered or capped in any way.

      This "precious bandwidth" story is either true or it's a lie. It's better for them if it's a lie.

      If it's a lie: they can open up the pipes to the max and let everybody use what they will. This will help a little to fend off the Google invasion.

      If it's true: they're hosed because Google will install more end-user bandwidth in Kansas City in the next six months than they have in their entire nationwide networks combined.

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  4. Re:Days of War by bill_mcgonigle · · Score: 5, Insightful

    Going by $720M / day, that's less than 200 days of the war in Iraq.

    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!

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  5. America's Priorities by periol · · Score: 5, Insightful

    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.

  6. 66 weeks in Afghanistan by Rinisari · · Score: 4, Interesting

    $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

  7. Re:Nightmare by Flipao · · Score: 4, Funny

    It'd be the death of porn as we know it :(

  8. Forgetting one thing... by portwojc · · Score: 4, Insightful

    "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.

  9. Don't need gigabit per home by Todd+Knarr · · Score: 4, Insightful

    For myself, I'd be happy with a solid 20 megabit connection. What I really want is:

    • 20 megabits upstream as well as downstream, so things like VoIP don't choke on multiple users and I can upload files to an external server without causing congestion.
    • A connection that stays 20 megabits instead of getting choked down to a fraction of that when a bunch of neighbors start using their connections heavily.

    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.

  10. Google, Apple, Netflix, et al must do this by rabtech · · Score: 5, Insightful

    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.

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  11. Meanwhile, Sonic.net is quietly doing it by Animats · · Score: 4, Interesting

    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.

  12. Why so much? by guruevi · · Score: 4, Interesting

    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.

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