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

[Dave Farber <dave () farber net>]

Begin forwarded message:

> From: George Ou <George.Ou () digitalsociety org>
> Date: February 12, 2010 7:31:46 AM EST
> To: "dave () farber net" <dave () farber net>, "ChrisSavage () dwt com" <ChrisSavage () dwt com 
> >
> Subject: RE: [IP] Re:    Google Plans to Build Ultra High-Speed  
> Broadband Networks

> “For example, I recall that Loma Linda (a municipal fiber build) use 
> d 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 attractiv 
> e.”
>
>
>
> I guess you think that Verizon must be really stupid for doing  
> things the old fashion bell-head way and spending $800 per home  
> passed plus another $800 to hook up an actual subscriber.  Those  
> young wizards at Google will just figure out how to cut costs in half.
>
>
>
> Now let us return to reality.  Verizon’s costs are the lowest in the 
>  industry because most of their cabling is aerial.  Underground plan 
> t costs about 7 times more money and this is one of the major reason 
> s Qwest is avoiding fiber because 3 quarters of their homes use unde 
> rground plant while Verizon has the opposite ratios.
>
>
>
> Google is going to cherry pick fewer than 1% of homes that will be  
> the cheapest/shortest aerial runs and communities with the least  
> onerous regulations.  Then they’re going to turn around and claim th 
> at this is somehow relevant to the remaining 99% of the nation.
>
>
>
>
>
>
>
> George Ou
>
>
>
>
>
> From: David Farber [mailto:dave () farber net]
> Sent: Thursday, February 11, 2010 5:43 AM
> To: ip
> Subject: [IP] Re: Google Plans to Build Ultra High-Speed Broadband  
> Networks
>
>
>
>
>
>
>
> 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 n 
> etwork with 200,000 customers would put them in the top 20 network o 
> perators in the country.  (Numbers fall off pretty steeply after Ver 
> izon-AT&T-Qwest-Century-Comcast-TW-Cox-Cablevision-Charter-BrightHou 
> se…) Their experiment may be the worst flop of all time, but whateve 
> r they learn will reasonably apply to a very large segment of the po 
> pulace.
>
>
>
> 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 hig 
> h 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 alo 
> ne – with billions still left.  Perhaps with currently available app 
> s there really is an upper limit to how much bandwidth any one perso 
> n will use, i.e., maybe it is possible to simply satiate the bandwid 
> th “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 s 
> ome 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 ho 
> useholds.  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 commun 
> ity (100 K pop), with above ground utilities (easy to build), outsid 
> e the snow and hurricane zones (no interruption of construction), an 
> d a poor cable TV system and no FIOS, their service could easily com 
> e 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 sub 
> sidize 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 mile 
> s 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 ser 
> vice.  If they choose a market that is currently underserved, they c 
> ould 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 custo 
> mers—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 u 
> nderstand while thinking they did understand it.  Running Google’s C 
> DN 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 route 
> rs.
>
>
>
> 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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