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Google Fiber Is Changing Its Strategy as Costs Grow (fortune.com)
Google is taking a strategy timeout on its high-speed-internet business. According to WSJ, the Google Fiber unit is -- including Los Angeles, Chicago, and Dallas -- after its initial rollouts proved time-consuming and expensive than anticipated -- is rethinking how to deliver internet connections in about a dozen metro areas (could be paywalled; alternate source). From a Fortune report: Turns out it is very expensive to run wires -- or in Google's case, fiber optic cables -- to each and every house that wants service. Known as the "last mile" problem, the high costs, in turn, make it difficult for companies to earn a solid rate of return on the installation investment. Google's effort, through its unit called Fiber that launched in 2010, is now seeking alternative means to connect to consumers homes or finding other people to pay the cost. Google has sought deals with municipalities and power companies to pay for the connections and is also exploring less expensive wireless technology. Meanwhile, Google has suspended efforts to add new cities such as San Jose, Calif., and Portland, Ore., using its prior strategy of stringing up cables to each customerâ(TM)s home.
I already have Fiber and Broadband to my house but oh wait, Google can't use those because my local politicians gave certain franchise rights to companies who made the investment in digging up the street. In my case at least it isn't a last mile problem, it's a blocked mile problem.
Harrison's Postulate - "For every action there is an equal and opposite criticism"
"Turns out it is very expensive to run wires -- or in Google's case, fiber optic cables -- to each and every house that wants service. "
Holy cow...did nobody at Google see what happens with similar utilities? Or did they just assume the old rules didn't apply to them since it was "on the Internet"? I thought the 1999 "we'll make it up in volume" rules were already thrown out. I highly doubt Economics 101 courses at Stanford leave out the discussion of natural monopolies.
The only thing I can possibly think that they were thinking is that the value of the data they were able to mine by being plugged _directly_ into your Internet usage habits would be way bigger than the cost to run fiber to thousands of houses.
Why do you think Verizon et al is now trying desperately to get out of the wireline business? They're a public utility and can't raise rates whenever they feel like it, unlike their wireless business. At the same time, you have real physical stuff deployed in the ground that needs to be maintained. It's the same over at the electric company, or worse, the water authority. I can't imagine how much it costs to maintain 100+ year old pipes and clean up after water main failures.
It's easy to run fiber up and down the streets. It's a real bitch to run fiber from the street into the house.
That's covered under your installation fees when you subscribe. That is not the last mile, that's the last 50 feet.
The Daddy casts sleep on the Baby. The Baby resists!
No planning of any kind of coordinated/mandated ditch/tunnel to each home.
Sorry but that kind of micromanagement would be a cure worse than the disease and places incredible restrictions on property design.
It's not that expensive to dig in your own house. It's expensive to outsource the problem to over paid contractors. When we broke our telephone line in the house the local telecom company wanted $12000 to run a new line (we live in an easement so our house to the street was 80m). We made a concession, if I dig a trench to the mandated 600mm depth and lay a piece of conduit for them then the repaired phone line only cost $200.
It took 2min to do a services lookup to ensure I wouldn't hit anything. The cost of hiring a trench digger was $140 for half a day. It took 2 hours to learn how to use it and dig the trench. Another 1.5hours or so for cleaning of the machine and pickup / return to the local hire shop. The conduit cost $60 for the extra heavy duty stuff.
How the heck a $200 expense + 4 hours labour turns into $11800 to this day I will never figure out, but man I need to get into the contracting business.
Google should actually continue to pursue this - no joke. Across the US, most metropolitan areas more than 70 years old with running water systems are due to have their water mains across the system replaced in the next decade or two. Lots of other areas, like mine, are getting a replacement of the natural gas mains. When the street's already torn up and the utilities are already running these lines to the premises, why not add fiber to the mix? Wise municipalities would require this, a forward thinking - relatively inexpensive - investment in their future.
A 42 word run-on sentence
Have the city maintain a key piece of your internet connection?
It works pretty well in Douglas and Chelan counties in Washington State. There, the PUD maintains a fiber infrastructure that covers nearly all the homes and businesses in all the various communities. They themselves do not provide the service (be it TV, Internet, etc...). As a customer, you have the choice of 8 or 10 different ISPs who all have access to the fiber. If you're a business you can also get transit through Level 3 or Zayo.
As far as repairs go, the PUDs are just almost as quick to repair any fiber breaks as they are to repair issues with the power grid.
It actually works really, really well.
...si hoc legere nimium eruditionis habes...
Many/most of us would probably be willing to pay for the last mile infrastructure, we just do not want AT&T/Google/Comcrap/TWC/Charter to own it. The natural monopoly is primarily because of a bad funding model. These guys will all race to your house if they can be sure of perpetual domination, but are slow if there's competition.
I like the idea of people taking out a bond for last mile telecom. The bond will cover the costs of installation and service of the best your city has to offer, you can choose your own provider, and once you pay off your bond you never pay another dime as long as you live there, so future upgrades are "free". Your infrastructure will be upgraded on a schedule as long as you are in good standing. Once you pay off your bond, you continue to get upgrades and service until you die or leave.
My parents have a similar arrangement where they live, and it seems to work amongst people who have heart attacks at the word "tax" but also like to have nice things. You can break the horrid monopoly who is renting you wires but makes more money with lousy service, by forcing them to own the service instead. If you don't want this service, then you don't have to take out the bond, and if not enough people are interested then it doesn't happen. The bond is non-transferrable (except perhaps to a spouse), so if you sell then someone else takes out a new bond. In this way it is eternally paid for. It's not perfect: you have to examine how the "central office" will be owned and maintained, what the bidding process is for upgrade and service and generally be good citizens keeping an eye on the utility. But it isn't a tax, it is voluntary, the government can't necessarily raid its budget, it breaks the monopoly and pays for itself.
Of course this is impossible in places where our ancestors sold their souls to AT&T, etc. for eternal monopolies.
Roads, electricity, water, gas, telephone: All of these things could only be built with significant involvement/investment/regulation from the government. It should be blatantly obvious that no amount of "free market" magic by itself is going to get fiber infrastructure built to every home in the country which currently already has the aforementioned infrastructures; most of which are much more expensive to build out than fiber lines. This is what I find most aggravating about the whole broadband mess. I'm imagining an alternate history where Eisenhower was never able to build the Interstate highway system because a bunch of powerful monopolies already had a bunch of bumpy dirt roads with exorbitant toll booths.
In June, Google announced that it would acquire Webpass, an urban ISP that delivers ethernet drops rather than requiring cable or DSL modems. WebPass has fiber connections throughout its various cities ("San Francisco, Oakland, Emeryville, Berkeley, San Diego, Miami, Miami Beach, Coral Gables, Chicago, and Boston") and connects the last mile with a wireless connection to the customer's rooftop using point-to-point radios.
This is mentioned in TFA as well:
Webpass already offers 100+mbps (up and down!) for $46/mo ($550/y or $60/mo) at the residential level, and I'm under the impression the speed is actually bottlenecked by the ethernet switching and cabling within each participating building rather than the wireless signal; they support up to 1Gbps using this model.
Use my userscript to add story images to Slashdot. There's no going back.
The "last mile" should be a public utility, like land-lines used to be. The carrier (ISP) should then be relatively easily switchable per what individual customers want in order to finally give us real competition, instead of 2 actual (crappy) choices plus a 3rd fake choice that most places have now
It's not economically efficient (i.e. redundant) for each vendor to lay wires all the way to each house. Centralize the final wiring, but make the up-stream part easily toggle-able between vendors so that many vendors can enter the market without investing an arm and a leg. They'd only have to run (or rent) wiring to the switching stations/nodes, NOT to each house.
That's how Vulcan's would do it. Ferengi-like humans got us our current oligopoly mess. Only the airline industry has worse customer satisfaction ratings than the big telecoms. Comcast et al. are just shy of crying babies, lost luggage, no leg room, and long airport waits.
Table-ized A.I.
It cost you as an individual 200 bucks because you weren't paying for your time. You as an individual are also not restricted by the same laws that bind a contracting company.
What would you have done if you slipped with your trench digger and maimed your leg? How much insurance did you have to pay for your job site? How much did you pay yourself for the time you spent, not just driving and cleaning, but also picking up and dropping off the equipment?
While I can't say specifically why the bill would be that ludicrously high, I can see how it *could* get that high. At a minimum, I can see having multiple bonded people on site to satisfy safety regulations. That alone would have run the bill up a couple thousand dollars. Now add the logistics of coordinating those people, both on-site and at company HQ, you've now involved a large number of people for just a half-day job.
You eliminated all that by taking on the work, logistics, and risk upon yourself, and leaving you with only having to pay for the equipment rental.
It was more of an attempt to "shake the tree"
No, it was posturing. This is also something I said years ago. Many people did believe that Google was planning "more cities" and was going to be a major telco, buy all sorts of spectrum, etc. Google Fiber has had a moderate impact in the cities it launched in, but overall it's been about as impactful as Verizon FIOS or AT&T Uverse.
Its simply what it is is -- remember that it evolving as well. -- sometimes, or maybe not i don't know -- is is pure English, or at least the way we talk it now -++- eggs, bread, milk, just a note for later -++- and the grades have to be good: in America) to keep up with the rest of the world [so this passes school good].
You can only group about 4-10 houses and maintain gigabit speeds, at a cost of having non-passive equipment distributed throuout the system. It makes a good starting point and helps get you moving quickly, but the endgame stays about the same.
From an engineering viewpoint, pre-running tunnels large enough to walk through seems like a great idea... until you realize that is the perfect transportation mechanism for rats and roaches to infiltrate every part of your city. And then there's the whole "water runs downhill" problem, e.g. prefab box tunnels tend to flood.
I've abandoned my search for truth; now I'm just looking for some useful delusions.