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Broadband services

Alphabet Is Serious About Google Fiber

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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KBode 2/1/2016 | 12:23:17 PM
Had doubts... I had my doubts early on; thought it would just be a five city experiment. But when you collectively look at the builds underway the total footprint starts to get pretty massive, even though it's still relatively just a small dent in a very large, very uncompetitive residential broadband market. Still, the conversation about Google Fiber alone has DRAMATICALLY ramped up conversations about competition and municipal broadband, the likes of which I've not seen in a decade. 
Steve Saunders 2/1/2016 | 1:55:43 PM
Re: Had doubts... Why is everyone - including, apparently, LR - always so kind to google??

6 years ago (an enternity in this market) they announced 
google fiber and for more than half a decade achieved nothing. now they've announced plans to do slightly more than nothing.

Yet noone calls this what it obviously is -  a completely failure to launch.

Why? 

I am VERY interested to see if they really ID a number for google fiber. My bet would be not. 

 

 

 

 

 

 

 
KBode 2/1/2016 | 2:00:43 PM
Re: Had doubts... Wall Street used to believe that as well, but has changed their tone in recent years. Existing deployments in Provo, Kansas City, and Austin are small, but once the ongoing San Antonio, Portland, Nashville, Salt Lake City, Raleigh/Durham, Charlotte, and Atlanta builds start to reach critical mass you're talking about a pretty sizeable footprint:

http://blogs.barrons.com/techtraderdaily/2015/12/09/google-may-be-more-aggresive-on-fiber-than-thought-says-bernstein/

And again, looking just at the early footprint ignores the benefits Google Fiber's hype has had on getting people excited about broadband again, and the conversation about how we break the uncompetitive last-mile residetial broadband logjam. 

Over hyped? Sure. Still important? Absolutely. 
brooks7 2/1/2016 | 2:03:58 PM
Re: Had doubts... Think about how many homes were connected 6 years into FiOS.  That would have been 2010?  Call it 3.5M homes connected or thereabouts?

seven

 
KBode 2/1/2016 | 2:08:19 PM
Re: Had doubts... FiOS was a much more aggressive undertaking. $24 billion was thrown on the table as a bet on the future. Google's approach I really do believe began as a PR exercise and with uncertain financing. Google's also building from the ground up, which takes considerably more time.

Again, none of this is to disagree that Google Fiber has been overhyped. But to ignore its value entirely is to miss the larger picture. 
mendyk 2/1/2016 | 2:17:03 PM
Re: Had doubts... Google, Amazon, Apple -- they all pretty much have gotten kid-glove treatment, Apple's recent issues notwithstanding. As for Google Fiber, it looks and feels like a skunkworks kind of thing. Maybe it will amount to something, maybe not. But it's hard to see it as being strategic to the company's success.
brooks7 2/1/2016 | 2:47:26 PM
Re: Had doubts... So what about FiOS was not built from the ground up?

And yes, FiOS was much more aggressive.  My take on Google Fiber is that it is a prompt to AT&T and Century to build fiber.  If Google wanted to, it has the cash right now to build Google Fiber out throughout the US.  It could have had a huge number of homes connected.

It is hyped mostly because people want to believe there are new networks that are going to be built.  There aren't new carriers that are going to spring into existence, since we all believe that the current ones are either commodotized or in trouble.  So, why would you go spend billions to get into the business.

Which is why we need to stop thinking new access networks are going to spring into existence and regulate the ones we have as monopolies.

seven
KBode 2/1/2016 | 3:02:59 PM
Re: Had doubts... "So what about FiOS was not built from the ground up?"

Upgrading from existing DSL is easier than what Google is currently doing, though both are daunting. And yes, it's possible to argue Verizon had it harder because it was building in the regulation-heavy, aging Northeast, while Google is clearly cherry picking locations where fiber conduit is more easily run (or already run). 

I think the last estimate I saw was Google has about 300,000 current customers, and by 2018 could easily push that tally to 3-5 million within a few years, which is not nothing.

And again, I think the impact on the national conversation about the lack of competition (and the state barriers to municipal entry) can't be under-stated. These protectionist state laws hindering public/private partnerships were largely ignored by the mainstream media until Google sparked a fire under the entire kettle...
KBode 2/1/2016 | 3:05:46 PM
Re: Had doubts... "Google, Amazon, Apple -- they all pretty much have gotten kid-glove treatment"

Perhaps in contrast to say, cable companies whose customer service rankings are worse than any other industry or even government, but I think all three of these companies have seen a lot of criticism for a wide variety of dumb behavior. 

The hatred of Google from the telecom sector at large is pretty palpable. And I now see companies that spent decades lobbying themselves into a position of regulatory capture now whining about Google lobbying government. But most of the wounds in telecom are self inflicted, especially in the residential broadband space.
msilbey 2/1/2016 | 3:27:21 PM
Re: Had doubts... There's nothing kind about it. Alphabet is pouring resources into Google Fiber. Whether it's successful from a revenue perspective is a whole different issue entirely. And I agree, we're unlikely to hear specific Google Fiber numbers on today's earnings call.
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