Interesting People mailing list archives

WORTH READING Google Plans to Build Ultra High-Speed Broadband Networks

From: David Farber <dave () farber net>
Date: Mon, 15 Feb 2010 09:23:04 -0500

I think this is worth on list djf

Begin forwarded message:

From: ken <ken () new-isp net>
Date: February 15, 2010 7:56:05 AM EST
To: Bob Frankston <Bob19-0501 () bobf frankston com>, ip <ip () v2 listbox com>, David Farber <dave () farber net>
Subject: Re: FW: [IP] re Google Plans to Build Ultra High-Speed Broadband Networks

Bob,

I fully expect that Dave will opt to take this off-list as it seems that
we may be some of the few who are interested in this discussion, which,
to be quite blunt with you, may be indicative of why this problem exist
in the country.

Speaking directly to your inquiry as to whether I accept that "prices
and difficulties are due to policy not technology" I would counter by
saying that this is not a binary situation.

We do agree that policy is a contributing factor in the cost of these
networks and I would even go as far as to suggest that policy could be
considered to be one of the most detrimental influences in the ongoing
delay the construction of next generation communications infrastructure.

Where we seem to have a disconnect is that there is a price, an
incredibly steep cost, to building one of these networks.

Here's a down and dirty analysis of that cost for your consideration.

According to the NationalAtlas.gov, there are four million miles of
roads and streets in the United States.
http://www.nationalatlas.gov/transportation.html

The Fiber-to-the-Home Council claims that "Fiber to the home networks
now pass more than 15 percent of the homes on the continent..."

If we are willing to accept those numbers we have the following data to
work with.

4,000,000 X .85 = 3,400,000 miles of raodway that needs to have fiber laid.

There are roughly 110,000,000 residential units in the US (including
MTUs) - with no allowance for business structures. 85% of 110,000,000
gives us 93,500,000 homes which need to be connected.

Using the $5K per mile number (which is certainly low for locations like
NYC) we can put a minimal price on what it would cost to connect the
remaining unserved part of the country.

3,400,000 X 5,000 = $17,000,000,000

Now let's assign the $600 number quoted to connect each household that
is currently not serviced. 93,500,000 X $600 = $56,100,000,000.

All total, we have $73,100,000,000 - which in the greater scheme of
things is not a lot of money, as we are both likely to agree. But,
remember, there is no allowance for trucks, warehouses, offices, and all
of the necessary additional supporting material and resources that a
project like this would require. If I had to put a number on that I
would suggest that the additional costs would more than quadruple the
number provided above.

But here's the rub...

This year the money handed out for heating energy assistance was cut but
roughly 50%. In my area of the country, we have serious problems as
senior citizens are turning their thermostats down to dangerous levels.

Selling the idea that tax dollars should be used to pay for what many
Americans consider to be a private corporation's property is going to be
a tough sell.

I fully expect that you and I would consider this to be an excellent
investment. For my part, there are any number of defense department
projects I would happily jettison in exchange for this infrastructure
but I doubt we could push this through Congress.

One other point that you raised, why Brett holds the views that he does,
I would not presume to speak for Brett but as someone that invested a
lot of his own money to build a WISP I believe I can speak to one aspect
of this point.

Exactly how do I get compensated for the work and money I laid out, both
from a business standpoint and as a way of investing in my community? If
the government comes in and uses my tax dollars to put me out of
business, what motivation is there for anyone to make any such
investment in the future? With that said, forget me - what about the
huge corporations who have invested tens of billions of dollars of their
investor's money? How does that get settled?

Respectfully,

Ken DiPietro
Ellerslie MD

Bob, if you have some free time I would enjoy taking this discussion to
the phone, as email only lends itself to less involved subject matter.

On 02/14/2010 11:09 AM, Bob Frankston wrote:

Do you mind if I sent this to the OIA list … I’ve got to admit that I’m
frustrated by some of Farber’s forwarding decisions but it’s his list
and his choices. I may edit the first paragraph to be less IP-centric.



*From:* Bob Frankston [mailto:Bob19-0501 () bobf frankston com]
*Sent:* Saturday, February 13, 2010 20:18
*To:* 'ken'
*Cc:* 'dave () farber net'; 'ip'
*Subject:* RE: [IP] re Google Plans to Build Ultra High-Speed Broadband
Networks



Dave – Before I spend too much time on this I’m curious whether others
on this list accept these limitations and how they react to
http://rmf.vc/?n=FIT.

We seem to be going in circles.

Ken – I’m also interested in your reaction to the talk.

If you accept that prices and difficulties are due to policy not
technology then why do you cite them as reasons for that things can’t
change? Google can change the dynamic they can effect policy and
challenge the telecom business model and remove the impediments to
hypergrowth – in fact we’re poised for rapid catch ups. Shouldn’t we
encourage them?

I’m puzzled by the comparison with Brett and Google. Google can make
this capacity available to all. If Brett weren’t trying so hard to be a
subscale ISP he’d benefit greatly by being one of those people users
hire to help them with do networking and use services that taking
advantage of the infrastructure. They’d get local support rather than
depending on the benevolence of a distant provide whose only interest is
maximizing ARPU.

-----Original Message-----
From: ken [mailto:ken () new-isp net]
Sent: Saturday, February 13, 2010 18:05
To: Bob Frankston
Cc: dave () farber net; 'ip'
Subject: Re: [IP] re Google Plans to Build Ultra High-Speed Broadband
Networks



Bob,



I tell my child that everything is easy once you know how to do it. I

explain to my mother (89 years of age) how to add attachments to email.



While customer service is one component of the operational cost, the

hardware necessary to operate a multi-gigabit network does not come

cheap, nor do the people who support it. In addition, there is the

network itself,and even at a cost of $1,500 per home connected, that

money needs to be recouped. While an argument can be made that each

household should own their own connection, that money still needs to

come from somewhere and I can assure you that where I live the majority

of households could not and would not raise that kind of money.



This is why there is an associated cost with each service the customer

finds valuable. At the risk of stating the obvious, there is also a cost

to connect to the POTS network, to deliver content (for television or

VoD) and while Google might enjoy peering, most smaller companies pay

extremely dearly for their upstream connectivity as Brett has mentioned.



I completely agree with you, the technology isn't the holdback, it is an

acceptable business model that needs to be developed, one that will be

agreeable to just about everyone.



Respectfully,



Ken DiPietro

Ellerslie MD



By the way, I applaud the philosophy you employed at Visicalc. In my

opinion it is the only way to go.



On 02/13/2010 05:44 PM, Bob Frankston wrote:

The question is not whether running a network need be expensive as

much as running a network is the right framing. This is why framing and
design are so important. Whenever something was hard to explain in
VisiCalc we fixed the program rather than tried to explain it.

-----Original Message-----

From: ken [mailto:ken () new-isp net]

Sent: Saturday, February 13, 2010 16:10

To: Bob Frankston

Cc: dave () farber net; 'ip'

Subject: Re: [IP] re Google Plans to Build Ultra High-Speed Broadband

Networks

Bob, (et al)

Answering somewhat briefly and without changing context...

I absolutely agree with respect for the need to completely reframe the

telecommunications regulatory system and I have high hopes that Chairman

Genachowski will be able to make those changes. Ironically, these

changes would be good for the telecommunications industry.

I will disagree with you in regard to your assertion that running a

network is not expensive. Perhaps we have different views of what

expensive means but I can assure you, if it were cheap, every used car

salesperson in the world would be in the business.

As far as support (and apologies, in advance for sounding elitist) we

seem to take for grated that many of the people we associate with are as

intelligent as they are. As someone who owned and operated an WISP, I

can reliably tell you that support is an ongoing issue - most of which

has nothing to with the network itself. Hell, I supported PCs for almost

two decades and if I had a nickel for every time I had to explain what a

double-click or a right-click was I'd be giving away gigabit

connectivity today.

In the final analysis, I believe we are mostly in agreement.

Respectfully,

Ken DiPietro

Ellerslie MD

On 02/13/2010 03:33 PM, Bob Frankston wrote:

I do think we agree on much but I want to focus on the crux of the

problem – the telecom framing. This is why I gave a brief talk

<http://rmf.vc/?n=FIT> on reframing the problem.

*Do you really mean that running a network is intrinsically expensive?

*I don't want you (the editorial you and I) to run a network I just want

you to maintain the facilities I use to do networking. I don't want to

pay you for networking for me any more than I'd want to be forced to pay

someone for an arranged marriage. The costs you cite for networking are

a cost of a bad architecture. They are not a necessary cost that I

should be forced to pay. This is why we need to understand telecom as

framing and not as something fundamental. Remember that the Internet

demonstrates that best efforts <http://rmf.vc/?n=UAC@BestEfforts> works

far better than network services like circuits.

We seem agree that many of the choices are constrained by policy

decisions driven by an attempt to keep the concept of "telecom" alive as

per the 19^th century design point. The very reason we needed a

regulatory system is that it's a dysfunctional construct, even if it was

generative in 1860.

As you note we can increase the capacity of the fiber with better

electronics but when we did it we got a collapse in the price for fiber

and telecom services. So we stopped the improving the technology and

under-deploy it just to keep the current dysfunctional model alive.

*And we accept the fairy tale story of scarcity even though we should

know that the Hush-a-phone people are still lying to us! *They keep

telling us why nothing can change because empowered user is the enemy of

ARPU. They frame customer support in terms of their broken architecture

and business model.

It's another story meant to scare children and other naïfs. When you do

consumer software (and hardware) you have to address the entirety of the

user experience rather than relying on customer support or, worse,

making support a profit center. With home networks my goal was "just

work". Alas, thanks to the problems with today's Internet protocols it

doesn't work as well as I'd like but that has created an industry of

third party support like Geek Squad.

I have a Nexus phone that has its support limits but supported phones

aren't really well supported either because of the gratuitous complexity

of the cellular /business/ model.

The key is in having an architecture that reduces the need for support

and you do this by decoupling the elements rather than having

all-or-nothing silos.

And you learn. In this case Google seems to be doing a limited

deployment so that it can learn. I hope others learn from their

experience so that we won't have to depend on Google for infrastructure

but will instead be able to hire local companies to install and maintain

the physical infrastructure.

After all, it is far less expensive that complicated things like sewers

and sidewalks.

Note: VoIP is not a service of a network provider – it's something users

can do using software and by optionally using third party providers.

Note 2: If you take that $5K/mile and break it down per strand it's not

much. If you view the bundle as a whole and break it down per gigabit

it's trivial. If you take advantage of flexibility and share paths you

reduce the miles, if …. Well, I can go on but you get the point.

*From:* Dave Farber [mailto:dave () farber net]

*Sent:* Saturday, February 13, 2010 14:26

*To:* ip

*Subject:* [IP] re Google Plans to Build Ultra High-Speed Broadband

Networks

Begin forwarded message:

   *From:* ken <ken () new-isp net <mailto:ken () new-isp net>>

   *Date:* February 13, 2010 1:51:10 PM EST

   *To:* Bob Frankston <bob2-39 () bobf frankston com

   <mailto:bob2-39 () bobf frankston com>>

   *Cc:* dave () farber net <mailto:dave () farber net>, 'ip'

   <ip () v2 listbox com <mailto:ip () v2 listbox com>>

   *Subject:* *Re: Google Plans to Build Ultra High-Speed Broadband

   Networks*

   Bob, (et al)

   So many points to address...

   Google Voice is, in fact, framed by the system it is legally

required to

   conform to. If we wish to see real change, this is where the

fight must

   begin.

   Turning to your comment about charging for VoIP, yes, old school is a

   correct label for that concept, as I'm sure we both realize that the

   cost for VoIP service will reach zero in the near future. You

will note

   that the analysis you are pointing to was written in 2005 and

even back

   then you will find in my writings that voice would be provided as

a free

   service eventually.

   Certainly cost reductions can be done but you might want to remember

   that running a network is expensive. As David Mercer has correctly

   pointed out, the customer service alone is an ongoing expense, even

   though it has been my experience that when a well designed is

deployed,

   customer service is minimized.

   The $5K/mile refers to a 144 strand bundle of fiber being

trenched using

   a two man team and a Ditch Witch. I am reliably told that Jaguar

expects

   their team to complete one mile of installed fiber per day. I do not

   know whether this service is carrying 100Mbps or one gigabit but the

   cost for hardware to light fiber at gigabit speeds when compared to

   100baseT is relatively trivial.

   Let me also raise one more critical factor in this discussion,

the PUC

   (or Public Service Board) can make or break any such deployment.

There

   is also the issue of gaining access to the poles, as with aerial

   deployments, as many locations have utility poles which have no

   additional capacity for fiber to be hung.

   Respectfully,

   Ken DiPietro

   Ellerslie MD

   On 02/13/2010 11:25 AM, Bob Frankston wrote:

   As I wrote in http://rmf.vc/?n=BeyondLimits the type of

hypergrowth we

       associate with Moore's Law stems from marketplace in which we

       are very

       accepting of what works. This means that even backhoes are

       subject to

       major price-performance improvements because we find ways to get

       more

       bits through existing paths by using better electronics

rather than

       bigger trenches.

       I want to be careful about being overly optimistic – Google's

voice

       services are still framed in terms of carrier concepts like

       phone calls

       and the Android store rebates part of the price to your

carrier but

       those can also be ploys to co-opt the incumbents.

       It's a matter of incentives – carriers need to limit capacity to

       maintain the value of their services and their bits. Google

       incentives

       are aligned with increase usage and capacity. That changes

       everything

       and upsets the accounting model we see in analyses such as

       http://nextgencommunications.net/blog/2005/05/the-better-model/

       which

       comingle technology costs with application costs. Note that that

       analysis assigns a monthly charge to VoIP – very old school.

       This goes

       right to the points I made in http://rmf.vc/?n=IPTelecomCosts.

       If Google isn't constrained by carrier architectures it could be

       very

       creative in finding ways to reduce costs and improve

       performance. For

       example it needn't build a home-run distribution

architecture. I can

       think of a number of ways to reduce the costs of providing

bit paths

       among homes and to reduce the cost of operating such facilities.

       If it

       isn't concerned with counting bits it can create a resilient

       infrastructure that isn't path-dependent and which scales

less the

       linearly with the deployment.

       My biggest concern is that this still seems to be a pay to

subscribe

       model but as this is not Google's main business I hope they

can past

       that. That would allow even further reduction in costs such as

       services

       housing complex as a whole and letting the residents divvy it up

       among

       themselves.

       If we're talking $5K/mile for example – is that the cost of 1

       strand or

       100 strands or bundles? Is that a gigabit or a terabit or a 100

       terabits? Is it the cost for the backhoe or the glass?

       Let's encourage Google to experiment. For Google this is a means

       and not

       an end so they have every incentive to drive the process and

       give us the

       factor of a million improvements we've seen in our home networks.

       *From:* Dave Farber [mailto:dave () farber net]

       *Sent:* Saturday, February 13, 2010 09:57

       *To:* ip

       *Subject:* [IP] Re: Google Plans to Build Ultra High-Speed

Broadband

       Networks

       Begin forwarded message:

          *From:* ken <ken () new-isp net <mailto:ken () new-isp net>

       <mailto:ken () new-isp net>>

          *Date:* February 13, 2010 9:52:48 AM EST

          *To:* dave () farber net <mailto:dave () farber net>

       <mailto:dave () farber net>

          *Subject:* *Re: [IP] Re:    Google Plans to Build Ultra

       High-Speed

          Broadband Networks*

          Dave,

          Perhaps these comments and this link will help to shed some

       light on

          this discussion.

          George, (et al)

          Donny Smith (Jaguar Communications) has the lowest connected

       cost of any

          FTTH network construction company that I am aware of and

       Jaguar trenches

          all of their installations.

          Here is a link to an analysis of Jaguar's network even

       thought I am

          reliably told that their numbers now are closer to $5K/mile

       for backhaul

          plus $600 per home connected.

http://nextgencommunications.net/blog/2005/05/the-better-model/

          Now, with respect to whether Google will cherry pick

locations, I

          believe it is only fair to wait and see before passing

judgment.

          Respectfully,

          Ken DiPietro

          Ellersile MD

          On 02/12/2010 10:54 AM, Dave Farber wrote:

              Begin forwarded message:

                  *From:* George Ou <George.Ou () digitalsociety org

       <mailto:George.Ou () digitalsociety org>

                  <mailto:George.Ou () digitalsociety org>

                  <mailto:George.Ou () digitalsociety org>>

                  *Date:* February 12, 2010 7:31:46 AM EST

                  *To:* "dave () farber net <mailto:dave () farber net>

       <mailto:dave () farber net>

                  <mailto:dave () farber net>" <dave () farber net

       <mailto:dave () farber net>

                  <mailto:dave () farber net>

                  <mailto:dave () farber net>>, "ChrisSavage () dwt com

       <mailto:ChrisSavage () dwt com>

                  <mailto:ChrisSavage () dwt com>

                  <mailto:ChrisSavage () dwt com>" <ChrisSavage () dwt com

       <mailto:ChrisSavage () dwt com>

                  <mailto:ChrisSavage () dwt com>

                  <mailto: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) 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."

                  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 plant

                  costs about 7 times more money and this is one of the

       major

                  reasons

                  Qwest is avoiding fiber because 3 quarters of their

       homes use

                  underground 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

                  that 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" <

                  <mailto:ChrisSavage () dwt com>ChrisSavage () dwt com

                  <mailto:ChrisSavage () dwt com>>

                  *Date: *February 11, 2010 8:27:39 AM EST

                  *To: *< <mailto:dave () farber net>dave () farber net

                  <mailto: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" <

                  <mailto:clj () jacksons net>clj () jacksons net

                  <mailto:clj () jacksons net>>

                  *Date: *February 10, 2010 9:47:32 PM EST

                  *To: *"'Faulhaber, Gerald'" <

<mailto:faulhabe () wharton upenn edu>faulhabe () wharton upenn edu

                  <mailto:faulhabe () wharton upenn edu>>

                  *Cc: *"'David Farber'" <

       <mailto:dave () farber net>dave () farber net

                  <mailto: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/>http://googleblog.blogspot.com/

and

         <http://www.google.com/appserve/fiberrfi>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

                  <http://assets.wharton.upenn.edu/~faulhabe>

                  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

                  <http://assets.wharton.upenn.edu/~faulhabe>

                  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:*  <mailto:dave () farber net>dave () farber net

                  <mailto: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 <

<mailto:gerry-faulhaber () mchsi com>gerry-faulhaber () mchsi com

                     <mailto:gerry-faulhaber () mchsi com>>

                     *Date:* February 10, 2010 5:59:59 PM EST

                     *To:*  <mailto:dave () farber net>dave () farber net

                     <mailto: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 <mailto:dave () farber net>

                         *To:* ip <mailto:ip () v2 listbox com>

                         *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" <

<mailto:charles.brownstein () verizon net>charles.brownstein () verizon net

                             <mailto:charles.brownstein () verizon net>>

                             *Date:* February 10, 2010 1:18:05 PM EST

                             *To:* David Farber <

                             <mailto:dave () farber net>dave () farber net

                             <mailto: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>http://online.wsj.com/?mod=djemalertTECH

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WORTH READING Google Plans to Build Ultra High-Speed Broadband Networks David Farber (Feb 15)