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Re Why Google Fiber Failed to Disrupt the ISPs
From: "Dave Farber" <farber () gmail com>
Date: Wed, 26 Jul 2017 10:44:34 -0400
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From: "Bob Frankston" <Bob19-0501 () bobf frankston com> Date: July 26, 2017 at 9:18:15 AM EDT To: dave () farber net Cc: dewayne-net () warpspeed com Subject: RE: [IP] Why Google Fiber Failed to Disrupt the ISPs I don’t see Google Fiber as a moonshot so much as being in the ISP framing of the Internet as a network service albeit it higher performance. It is still a subscription sold to customers. I spoke to competitors like Comcast and the sense was that the cost of the network is not a big deal and thus Google Fiber wasn’t’ really disruptive. If anything it perpetuated the old model because, as long as we have content silos, then companies like Comcast needed their own infrastructure. Without having content it’s unclear how the bits-only business would make money. I’ve compared it without owning the second or third electric grids except that bits have no intrinsic value apart from the content. So no surprise that it’s hard to find a business rationale. Sure Google benefits from faster ad delivery and web pages so getting the market to focus on higher speed helps Google but it doesn’t necessarily help society in getting past the network-centric (pipe) focus. I’m also a customer of Google Voice which does have some nice incremental improvements of traditional but has not been a big financial success in its own right. It makes me worry about their continued willingness to support it. Perhaps the problem is that in hiring experts in networking and telephony there is a tendency to do incremental improvements rather than effecting real change. Bob Frankston http://Frankston.com @BobFrankston From: Dave Farber [mailto:farber () gmail com] Sent: Tuesday, July 25, 2017 14:43 To: ip <ip () listbox com> Subject: [IP] Why Google Fiber Failed to Disrupt the ISPs Begin forwarded message: From: Dewayne Hendricks <dewayne () warpspeed com> Date: July 25, 2017 at 10:59:35 AM EDT To: Multiple recipients of Dewayne-Net <dewayne-net () warpspeed com> Subject: [Dewayne-Net] Why Google Fiber Failed to Disrupt the ISPs Reply-To: dewayne-net () warpspeed com Why Google Fiber Failed to Disrupt the ISPs Where’s the fiber-optic internet we were promised? By Victor Luckerson Jul 21 2017 <https://theringer.com/google-fiber-struggles-7d2bb5399a12> This week brought more bad news for Google Fiber, the search giant’s troubled bid to become a powerful internet service provider. On Tuesday, Greg McCray stepped down as CEO of the company’s ISP business (now formally housed under Access, a subsidiary of Google parent company Alphabet). His departure comes just nine months after Craig Barratt left the same role. Meanwhile, the Access division has faced staffing cuts, and aggressive plans to expand to more cities are on hold indefinitely. Google Fiber began as an experiment, then briefly seemed poised to grow into a legitimate contender against the ISP incumbents. But today it serves as proof that providing high-speed wired internet is a losing proposition, even for one of the world’s wealthiest companies. Early on, Google was careful to couch its ambitions as a provider of high-speed internet. The original February 2010 announcement of Fiber called it an “experiment.” Kansas City, Missouri, the first place to get Google Fiber in 2012, was thought of as a “test bed.” Journalists speculated that Fiber was largely a symbolic project meant to shame the biggest ISPs into offering faster internet speeds, thus creating an environment of ubiquitous lightning-quick internet that Google could service with its bread-and-butter products like Search and YouTube. Fiber has succeeded on that front. Companies like AT&T have raced to offer gigabit internet in specific markets before Google could, and this spring Verizon announced it would begin offering near-gigabit speeds to more than 8 million customers in East Coast cities. Google clearly wanted Fiber to be more than a moonshot, though, and slowly revealed ambitions of building an ISP with national scale. In 2014 the company announced that it would explore expanding Fiber to nine new metro areas, up from three previously. The same year, Barratt was promoted to be a key lieutenant to Google CEO Larry Page, alongside big names like Sundar Pichai and Susan Wojcicki. Google steadily rolled out new Fiber cities and teased potential launches in others through 2016. But burning money on a high-speed internet gambit made less sense after Google restructured into Alphabet and brought on CFO Ruth Porat. Both moves were meant to inject more fiscal responsibility in a company that prides itself on maintaining a culture of innovation. Digging up city streets to lay fiber-optic cable is wildly expensive. Last year Alphabet revealed that Fiber made up the majority of capital expenditures for its “Other Bets,” the catch-all categorization for its many far-flung businesses that are not tied to the core Google products. Getting permission to install a fiber network requires working with city leaders, which increases expense and slows deployment. Most worryingly, there’s scant evidence that consumers are willing to pay for gigabit internet en masse, despite its growing availability. Google aimed to get 5 million people to sign up for Fiber within five years but widely missed its target, according to The Information. “Even Google can’t afford to just do projects and just lose a whole bunch of money,” says Dan Rayburn, principal analyst at Frost & Sullivan. “I think you’re stuck with the incumbents.” These combined factors are probably why the bloodletting began in Google’s Access division last year. Barratt stepped down in October 2016, and in that same month, 9 percent of Access’ 1,500 employees were let go, and plans to expand to markets such as Los Angeles and Dallas were halted, according to Bloomberg. In February, when McCray was named the new CEO, hundreds more employees were reportedly movedfrom Access to Google. McCray’s recent ouster didn’t come with another round of downsizing (it may be tied to inappropriate office comments), but it still leaves the company rudderless for the time being. [snip] Dewayne-Net RSS Feed: <http://dewaynenet.wordpress.com/feed/> Archives | Modify Your Subscription | Unsubscribe Now
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- Re Why Google Fiber Failed to Disrupt the ISPs Dave Farber (Jul 26)