Google Fiber's Non-Experimental Experiment
5:00 PM -- If we're to take Eric Schmidt at his word, the Google Fiber project in the Kansas Cities is so much more than that.
"It's actually not an experiment; we're actually running it as a business," the Google (Nasdaq: GOOG) executive chairman said Wednesday at The New York Times's Dealbook Conference, noting that the company hopes to bring its fibery goodness to "more cities."
I take that to mean that Google Fiber's goal is not to see how much money it can flush down a black hole. After all, he's in charge of running the Google business, so I wouldn't expect him to say anything different. But it's also too early to say if Google's demand-driven deployment approach will turn out to be a viable moneymaking venture. It's just now starting to get paying customers. (See Google Fiber Starts to Hook Up Customers and KC Gets Google Fiber for Real in October.)
But I certainly wasn't surprised that Schmidt didn't go out of his way to also volunteer that Google has a nifty out clause if things go south or it simply decides it would rather hand the keys over to a "third party." (According to its agreements with the cities, Google can terminate its deals two years after it started building the networks in Kansas City, Kan., and Kansas City, Mo.) (See TWC Wants Piece of Google Fiber's Sweet Deal .)
Considering the projected costs, it's highly unlikely that Google will ever replicate what it's doing in Kansas City on a national scale. But if the effort in the Kansas Cities does end up making business sense, we already know that hundreds of cities would line up to give Google a shot at another sweetheart deal. So I would not put a new, one-off Google Fiber project beyond the realm of reason. (See Googlemania!)
But until Google proves that its fiber ambitions extend beyond the Kansas City region, the threat to cable operators is mostly empty. That means that the MSOs don't have to go out and deploy 1Gbit/s Docsis 3.0 technology tomorrow. But it does prod them to at least keep their foot on the gas and have it ready to roll once there's real demand for it. (See Google's Pointy Stick and More Docsis 3.0 Gateways Gun for 1-Gig .)
— Jeff Baumgartner, Site Editor, Light Reading Cable