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Alphabet Is Serious About Google Fiber

Mari Silbey
2/1/2016
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From the moment Google first unveiled plans to deploy gigabit broadband service in 2010, industry watchers wondered if this was an experiment, a way to force other ISPs to invest further in their networks or a serious business venture. Since then, progress has been slow. Google Fiber has only rolled out gigabit Internet in Kansas City; Provo, Utah; and Austin, Texas, although it has plans for many more cities. The company's also said very little about the TV side of its business.

On the surface, it might appear that Google Fiber Inc. is still only dabbling in consumer telecom services. But ahead of today's Alphabet Inc. earnings call -- the first that will break out Google (Nasdaq: GOOG)'s traditional business lines from those under the new category of "Other Bets" -- there are several signs that Alphabet has big plans for Google Fiber.

First, there are further gigabit deployments in the works, including in Atlanta; Nashville; Salt Lake City; and Charlotte, NC, where workers recently broke ground to start laying fiber and begin constructing fiber huts. (See Gigabites: Google Fiber Forges On.)

Second, The Washington Post just broke the news that Google Fiber has been inviting customers to try out a new Google Fiber Phone service. The test offering includes several of the features already available through the over-the-top service Google Voice, including a cloud-based phone number that ties mobile and landline devices together, voicemail transcription and call screening options. If Google Fiber launches Google Voice broadly, that completes the triple-play bundle experience, and gives the company service parity with cable and telco providers.

Third, while Google Fiber has largely kept its video business under the radar, that doesn't mean it's leaving it to languish. It may only mean that the company has been biding its time.


For more on pay-TV trends, check out our dedicated video services content channel here on Light Reading.


As evidence, Google Fiber was one of the more vocal participants in the FCC advisory committee meetings last year that led to the Notice of Proposed Rulemaking on set-top competition currently being circulated. (See How the FCC's Set-Top Plan Could Work.)

And, since the FCC announced its NPRM, Google Fiber has already held at least one meeting for Congressional staffers to show off a "competitive video solution." The Future of TV Coalition is up in arms about this demonstration, suggesting that it means Google Fiber had the inside track on FCC plans. But realistically, the proposal that the FCC appears to have adopted is based on technical specifications made public last year. It's reasonable to assume that Google Fiber developed its demo around the same specifications.

Regardless of the political haranguing, the fact that parent company Alphabet is putting resources toward developing new video solutions and lobbying Congress so quickly and efficiently after the FCC's latest announcement leads to the conclusion that the company is very serious about pursuing video further, and about using Google Fiber service operations to do so.

Alphabet may still choose to limit the amount of data it reveals about Google Fiber in today's earnings call after the US markets close. But as one of the company's "other bets," Google Fiber appears to be getting a lot more attention internally than many people realize from the outside.

— Mari Silbey, Senior Editor, Cable/Video, Light Reading

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kq4ym
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kq4ym,
User Rank: Light Sabre
2/10/2016 | 10:13:30 AM
Re: can we just call it like it really is?
It will be interesting to see what Google goes for in the future, and remember Google has a very huge lobbying machine in Washington. It may or may not be a surprise down the road, but Google certainly is looking for any opening to get heavily into the video market bit by bit, or gigantic leap when the time is ready.
brooks7
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brooks7,
User Rank: Light Sabre
2/4/2016 | 12:50:12 AM
Re: Had doubts...
1 - The state laws you reference only applies to munis.  Anybody can build a network at any time as a private company.  So, Google can start building networks to every home in the US if it feels like it.

2 - The structural thing, assuming you mean that they build networks, I agree with.  But Google could just buy AT&T if it really wanted Fiber in all those cities and then go do it.  Which shows to me it doesn't want to.  If it really wanted to Google would just buy all the telcos.  Since they don't overbuild there is no loss of competition and since Cable would still be 60%+ of the broadband market, there should not be any issue there.

seven

 
KBode
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KBode,
User Rank: Light Sabre
2/3/2016 | 5:10:25 PM
Re: Had doubts...
They had numerous advantages, both structurally and in the fact AT&T and Verizon all but dictate the cadence of state telecom law.
KBode
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KBode,
User Rank: Light Sabre
2/3/2016 | 5:09:54 PM
Re: can we just call it like it really is?
"Are we interested in this because we want cheaper Internet service?"

That's part of it. AT&T Gigapower service is $40 cheaper in cities with Google Fiber. Competition is a good thing, unless you're an incumbent or making money off of incumbents.


"If so, what incentive is there to become a 3rd vendor in a city?"

Well for one, usually one of the two vendors in a city (telcos) usually can't deliver the FCC's standard definition of broadband (25 Mbps), so what you're usually talking about is a cable monopoly which refuses to compete on price.

There's not much incentive for a company without Google's wallet to do so at scale due to high costs, but the Google build has involved helping cities learn how to get out of the way bureaucratically, and increased broadband competition generally benefits everybody, so I'm not sure I understand the question.
Duh!
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Duh!,
User Rank: Blogger
2/2/2016 | 4:54:19 PM
Re: Had doubts...
Verizon's biggest advantage for the FiOS build was existing strand on existing pole attachments.
brooks7
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brooks7,
User Rank: Light Sabre
2/2/2016 | 4:32:15 PM
Re: can we just call it like it really is?
But CLECs didn't build new Access Networks (generally there were exceptions) which is what Google is doing.  But let me as the seriousness question this way:

Are we interested in this because we want cheaper Internet service?

If so, what incentive is there to become a 3rd vendor in a city?

seven

 
mendyk
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mendyk,
User Rank: Light Sabre
2/2/2016 | 3:00:03 PM
Re: can we just call it like it really is?
The standard CLEC strategy in the late '90s was to announce a nice long list of metro areas where they were going live, and then check off those areas once they installed a minimal amount of equipment. Actual network builds were far and few between. If Google is in fact serious about overbuilding broadband networks in hundreds of markets, then I'd question the collective sanity given the commoditization of those networks.
KBode
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KBode,
User Rank: Light Sabre
2/2/2016 | 2:36:34 PM
Re: can we just call it like it really is?
I don't know, there were a lot of BAD CLECs to be sure, but there were also many good ones quite literally driven right out of the industry by deeper pocketed incumbents who repeatedly lobbied to make their lives miserable (or downright impossible).

Google is, even if it's limited in nature, building networks from the ground up. I think some of the reaction  to over-hype in these threads is legitimate, but the overall sentiment that Google is not really doing anything isn't supported by the reality on the ground in Salt Lake CIty, Charlotte, elsewhere.
mendyk
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mendyk,
User Rank: Light Sabre
2/2/2016 | 12:21:49 PM
Re: can we just call it like it really is?
This does elicit some reminders of the CLEC "movement" of the late 1990s, which turned out to be lots of ... fiction. But, as you say, Google.  So it's all good.
cnwedit
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cnwedit,
User Rank: Light Beer
2/2/2016 | 9:52:03 AM
Re: Serious / not serious
The latter piece of this comment is where I fault Google most. I never expected them to build out fiber to 1200 communities all at once when they didn't know how to build out one network. 

But I think the fact they basically took advantage of cities' desperate desire for broadband to ask for - and get - concessions on things like rights-of-way, power and more made Google seem more like a cynical opportunist than any kind of innovator. 

That's old news, however, and has been covered here and elsewhere. 
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