Re: Google Plans to Build Ultra High-Speed Broadband Networks

[David Farber <dave () farber net>]

Begin forwarded message:

From: "Savage, Christopher" <ChrisSavage () dwt com>
Date: February 11, 2010 8:27:39 AM EST
To: <dave () farber net>
Subject: RE: [IP] Re: Google Plans to Build Ultra High-Speed Broadband Networks

Dave,
 
I’d add the following to Chuck’s points.  Suppose Google goes big and ends up serving 500,000 people.  At 2.5 
people/household that’s 200,000 customers.  I don’t have the numbers handy but I suspect a network with 200,000 
customers would put them in the top 20 network operators in the country.  (Numbers fall off pretty steeply after 
Verizon-AT&T-Qwest-Century-Comcast-TW-Cox-Cablevision-Charter-BrightHouse…) Their experiment may be the worst flop of 
all time, but whatever they learn will reasonably apply to a very large segment of the populace.
 
For example, I recall that Loma Linda (a municipal fiber build) used some UK-based inexpensive fiber-laying system 
using micro-trenches, and fiber in some special sheathing to make it especially easy to run.  A completely new network 
might be able to use such a system in a way that an established network provider might not find attractive.  If that 
process was cheap enough, and scaled well, that would be very interesting information for the industry as a whole (not 
to say regulators) to see.  (Cf. The Innovator’s Dilemma).  It would imply that Chuck’s back-of-the-envelope cost 
estimates are high by a nontrivial factor.
 
As another example, I have heard some strong network neutrality proponents argue that over a reasonable planning 
period, the cost of adding bandwidth to deal with the demands of the top 5% or 1% or 0.1% of users who send/receive 
massive amounts of data is actually cheaper than the cost of deploying the systems needed to monitor, limit, and/or 
bill for their usage.  This has always struck me as an interesting, if a bit implausible and counterintuitive, 
assertion.  A 1 Gbps network might well provide a test of it.  (I am reminded here of the survival approach of the 
17-year cicadas that we get here in the mid-Atlantic.  It’s called “predator satiation.”  With billions of defenseless 
cicadas available, predators eat all of them they want, and then get sick of them and mainly leave them alone – with 
billions still left.  Perhaps with currently available apps there really is an upper limit to how much bandwidth any 
one person will use, i.e., maybe it is possible to simply satiate the bandwidth “hogs”.)
 
I have to say – win, lose, or draw, Google’s proposal here is one of the most interesting things to happen in the 
business for quite some time…
 
Chris S.
From: David Farber [mailto:dave () farber net] 
Sent: Thursday, February 11, 2010 7:56 AM
To: ip
Subject: [IP] Re: Google Plans to Build Ultra High-Speed Broadband Networks
 
 
 
Begin forwarded message:
 
From: "Charles Jackson" <clj () jacksons net>
Date: February 10, 2010 9:47:32 PM EST
To: "'Faulhaber, Gerald'" <faulhabe () wharton upenn edu>
Cc: "'David Farber'" <dave () farber net>
Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband Networks


Well, Google never claimed to be providing a real broadband distribution service or significant infrastructure.  
Rather, they proposed an experiment.  On Google’s blog, they claim that they are looking to offer service to between 
50,000 and 500,000 people.   If we assume 2.5 people per household, this works out to 20 to 200 K households.  If we 
assume $1,000/passing, $1,000 more per active drop, and 10% penetration, then passing 50 K people (20K subs) would cost 
them $22 million.  I think they can afford that.
 
Heck, they might learn enough about future or emerging consumer needs that this experiment will be well worth the 
money.   
 
See http://googleblog.blogspot.com/ and http://www.google.com/appserve/fiberrfi.
 
There’s also the political side.  If they pick a medium sized community (100 K pop), with above ground utilities (easy 
to build), outside the snow and hurricane zones (no interruption of construction), and a poor cable TV system and no 
FIOS, their service could easily come out looking golden.
 
Making the experimental network “open” probably costs them little and gives them another political plus.  
 
 
Chuck
 
 
From: Faulhaber, Gerald [mailto:faulhabe () wharton upenn edu] 
Sent: Wednesday, February 10, 2010 9:15 PM
To: Charles Jackson
Cc: 'David Farber'
Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband Networks
 
Well, if we have a charitable organization willing to lose money on broadband distribution, fantastic!  We’ll let 
search advertising subsidize infrastructure.  I’m all for that; but then I don’t own any Google stock.
 
My point re: CLECs is that a firm actually needs to have real experience in local distribution networks to make them 
work (i.e., run with reasonable reliability, not break down due to weather and poor outside plant, not have the fiber 
chewed up be squirrels, not have repeaters used for target practice, all the boring stuff that network guys know and 
Silicon Valley guys don’t), not just money to throw at the problem.  When they’ve successfully trenched 5,000 miles of 
fiber under city and suburban streets and it actually operates for a year without failure, then they might have some 
network cred.
 
Professor Emeritus Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor Emeritus of Law
University of Pennsylvania
From: Charles Jackson [mailto:clj () jacksons net] 
Sent: Wednesday, February 10, 2010 8:56 PM
To: Faulhaber, Gerald
Cc: 'David Farber'
Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband Networks
 
I’m game to sharing this exchange with the IP audience.  
 
My response to Gerry’s response is that the proper model for Google’s experiment is not a CLEC (funded by investors 
trying to get their money back) but more like “Green Acres” in which Oliver Wendell Douglas can get by even if he 
doesn’t make any money farming.  If Google is willing to lose a little money (in Google terms) and puts a good manager 
on the project, they can provide first-rate service.  If they choose a market that is currently underserved, they could 
end up looking pretty good.  
 
If they offered service to 100,000 people, that would be about 40K households.  If they got 10% penetration, that’s 
only 4K customers.  It doesn’t take a lot of resources to give good service to 4K customers—especially if you are 
willing to lose $2 for every $1 billed.  
 
Chuck
 
 
 
======================
Charles L. Jackson
 
301 656 8716    desk phone
888 469 0805    fax
301 775 1023    mobile
 
PO Box 221
Port Tobacco, MD 20677
From: Faulhaber, Gerald [mailto:faulhabe () wharton upenn edu] 
Sent: Wednesday, February 10, 2010 8:05 PM
To: Charles Jackson
Cc: David Farber
Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband Networks
 
Chuck [Dave, I’m happy to have this exchange on IP, if Chuck agrees]--
 
I mis-spoke.  I meant experience in running a local distribution network, and was a bit sloppy in not being specific.  
But running a long-haul network is worlds apart from running a local distribution network.  Evidence?  Many of the 
CLECs circa 2000 were run by redundant AT&T operations guys, who thought they understood networks.  Turns out they were 
clueless when it came to local distribution, and most went belly-up (helped along by recalcitrant ILECs of course).  
But these guys went into a business they didn’t understand while thinking they did understand it.  Running Google’s CDN 
is no experience for local distribution.
 
Professor Emeritus Gerald Faulhaber
Business and Public Policy Dept.
Wharton School, University of Pennsylvania
Philadelphia, PA 19104
Professor Emeritus of Law
University of Pennsylvania
From: Charles Jackson [mailto:clj () jacksons net] 
Sent: Wednesday, February 10, 2010 7:47 PM
To: dave () farber net
Cc: Faulhaber, Gerald
Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband Networks
 
Gerry wrote:
Google has never run a carrier-grade local networking business (besides its trivial Mountainside, CA WiFi network) and 
has zero experience in networking.  Networking is a very different business from anything Google has done before . . .
 
 
 
Google’s Internet backbone appears to be the second or third biggest backbone.  Google runs an ENORMOUS network.   A 
recent presentation stated that Google accounts for about 5% of Internet traffic—behind only Level 3 and Global 
Crossing.  See http://www.nanog.org/meetings/nanog47/presentations/Monday/Labovitz_ObserveReport_N47_Mon.pdf. 
 
Google may not be an ILEC or cable company, but the organization must possess a significant (enormous?) amount of 
networking knowledge.   They haven’t been doing access networks—but there are probably very few entities in the world 
that spend more on routers.
 
If Google chooses to offer service in a community that has a poor cable company and no FiOS, they should find it easy 
to look golden (assuming that they are willing to lose a few hundred dollars per household passed.)    
 
 
Chuck
(Charles L. Jackson)  
 
 
From: Dave Farber [mailto:dave () farber net] 
Sent: Wednesday, February 10, 2010 6:50 PM
To: ip
Subject: [IP] Google Plans to Build Ultra High-Speed Broadband Networks
 
I agree with Gerry. Djf


Begin forwarded message:

From: Gerry Faulhaber <gerry-faulhaber () mchsi com>
Date: February 10, 2010 5:59:59 PM EST
To: dave () farber net
Subject: Google Plans to Build Ultra High-Speed Broadband Networks

Dave [for IP]
 
I am a huge enthusiast for more broadband competition and welcome Google into the business.  I have always wondered why 
Google (whose market cap = $179B compared to total US cable industry = $95B) whined incessantly about the domestic BB 
providers when it could well have entered the market itself.  It certainly has the financial strength to do so, and has 
for quite some time.  Its entry (which this announcement perhaps heralds) is long overdue, in my book.  But this is 
merely a blog announcement, and talk is cheap.  Let's be cautious about how much we read into this.
 
But let's be serious; Google has never run a carrier-grade local networking business (besides its trivial Mountainside, 
CA WiFi network) and has zero experience in networking.  Networking is a very different business from anything Google 
has done before, and my guess is that unless they are in for the long haul, they will get their head handed to 
them...by customers who are unwilling to tolerate poorly performing networks.  They have also shown themselves 
cack-handed at dealing with the politics of local distribution.  Remember the Google/Earthlink San Francisco Free WiFi 
network proposal?
 
Google, I certainly encourage you to get into this business.  But this ain't no search engine biz; running 
carrier-grade networks for commercial and residential customers is tough and demanding and presents challenges you have 
never encountered before.  I hope you are up to it.
 
Professor Emeritus Gerald Faulhaber
Wharton School and Law School,  University of Pennsylvania
----- Original Message -----
From: Dave Farber
To: ip
Sent: Wednesday, February 10, 2010 1:25 PM
Subject: [IP] WSJ TECHNOLOGY ALERT: Google Plans to Build Ultra High-Speed Broadband Networks
 
 


Begin forwarded message:

From: "charles.brownstein" <charles.brownstein () verizon net>
Date: February 10, 2010 1:18:05 PM EST
To: David Farber <dave () farber net>
Subject: Fwd: WSJ TECHNOLOGY ALERT: Google Plans to Build Ultra High-Speed Broadband Networks

 
 
__________________________________
Technology Alert
from The Wall Street Journal
 
 
Google plans to build and test broadband networks that could deliver speeds more than 100 times faster than what most 
Americans use. The plan, announced on a company blog, could expand Google's position on the Internet by answering 
consumer demands for ever-faster connections.
 
http://online.wsj.com/?mod=djemalertTECH
 
 
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