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Why Google Fiber Is High-Speed Internet's Most Successful Failure
Blair Levin and Larry Downes report via Harvard Business Review: In 2010, Google rocked the $60 billion broadband industry by announcing plans to deploy fiber-based home internet service, offering connections up to a gigabit per second -- 100 times faster than average speeds at the time. Google Fiber, as the effort was named, entered the access market intending to prove the business case for ultra-high-speed internet. After deploying to six metro areas in six years, however, company management announced in late 2016 that it was "pausing" future deployments. In the Big Bang Disruption model, where innovations take off suddenly when markets are ready for them, Google Fiber could be seen as a failed early market experiment in gigabit internet access. But what if the company's goal was never to unleash the disrupter itself so much as to encourage incumbent broadband providers to do so, helping Google's expansion in adjacent markets such as video and emerging markets including smart homes?
Seen through that lens, Google Fiber succeeded wildly. It stimulated the incumbents to accelerate their own infrastructure investments by several years. New applications and new industries emerged, including virtual reality and the Internet of Things, proving the viability of an "if you build it, they will come" strategy for gigabit services. And in the process, local governments were mobilized to rethink restrictive and inefficient approaches to overseeing network installations. The story of Google Fiber provides valuable lessons for future network transformations, notably the on-going global race to deploy next-generation 5G mobile networks. It seems, then, a good time to review the story of how the effort came into being, what it achieved, and what it teaches investors, consumers, and community leaders eager to ensure continued private spending on internet infrastructure.
Seen through that lens, Google Fiber succeeded wildly. It stimulated the incumbents to accelerate their own infrastructure investments by several years. New applications and new industries emerged, including virtual reality and the Internet of Things, proving the viability of an "if you build it, they will come" strategy for gigabit services. And in the process, local governments were mobilized to rethink restrictive and inefficient approaches to overseeing network installations. The story of Google Fiber provides valuable lessons for future network transformations, notably the on-going global race to deploy next-generation 5G mobile networks. It seems, then, a good time to review the story of how the effort came into being, what it achieved, and what it teaches investors, consumers, and community leaders eager to ensure continued private spending on internet infrastructure.
People forgot that the main reason Google Fiber failed was because immediate legislation passed basically everywhere, as local fiber networks not owned by communications companies became illegal. The reason it is a $60 billion dollar industry is because they will do anything not to chew into their profit margins. There's a reason that 3 of the top 5 companies that top lobbying expenditures are in that business.
Google Fiber, Project Fi - I've always looked at things like these as basically Google telling the telcos that, if they really had to, they could compete directly against them.
A problem for Google (exacerbated with the end of net neutrality) is that the telcos etc. who have the "last mile" to the actual people that Google depends on to survive, could choke off Google's air (this is the same reason why Google decided they needed their own mobile OS and bought Android and causing a break with their previously-happy relationship with Apple).
It's a matter of survival for Google that, if they had to, if all the telcos suddenly imposed fees on Google/advertisers since, hey, "you're making money off OUR customers", they could pour some of the money they have into making Google Fiber, Fi a full-blown competitor, as opposed to a "project".
It's a signal to the telcos "I could kill you if you make me need to, so let's just carry on with the status quo shall we?". Their very existence and the visible ability to scale up if they have to, is all Google really wants - all other benefits (improving internet access overall etc.) are bonuses.