Google Fiber May Disappoint, But It’s Not a Failure

As news hit social media channels that Google Fiber was pausing its roll-out of gigabit broadband – many thoughts came to mind.

But the #1 thought – was simply this:  without Google Fiber disrupting the market there would be no GigaPower, GigaBlast, Gigabit Pro, Gigaspeed, etc. especially from the likes of AT&T, Cox Communications, Suddenlink, etc.

Yes, many of the Telcos would still be rolling out FTTH services – but their top tiers would likely be 100Mbps or perhaps 250Mbps – but there would certainly be no rush to offer 1 Gigabit.

In fact, Google Fiber’s greatest contribution to the industry was turning the business model on its head.  And here’s how:

Pricing

When Google Fiber introduced its pricing for Kansas City – it was unlike anything the industry had seen to date.  In fact – here is a comparison of Google against some of the competition when it launch in 2012 versus current pricing.

As you can see – most operators have significantly dropped their prices for gigabit broadband following Google Fiber’s lead.OperatorInternet2012 Monthly Cost2016 Monthly CostGoogle Fiber1GB/1GB$70$70Verizon300MB/65MB$209.99300M Symmetrical

$169.95Chattanooga (EPB)1GB/1GB$349.95$69.95Lafayette Utilities100MB/100MB$199.95$109.95

In 2012, we referred to Google’s strategy as a “game shifter” – rather than a game changer.  Unlike other operators – Google Fiber appeared to be able to deploy FTTH at significantly lower costs than most operators.  This was due in part to careful planning (fiberhoods and pre-registration) – which helped to guarantee adoption rates, as well as  in-house equipment development – which allowed them to better control costs.

City Partnerships

When Google announced its “Think Big with a Gig” program – interest in becoming a Google Fiber was immense (and frankly, still is).  However, in order to be considered – cities had to offer A LOT of concessions.  These included providing Google with complete access to its facilities, assets and infrastructure and will not  imposing any charges for access to or use of any City facilities; as well as permit and inspection fees. Infrastructure includes, but will not be limited to, conduit, fiber, poles, rack space, nodes, buildings, facilities, CO locations, available land, and others (TBD). In addition, the partner cities, must allow Google to have access to necessary rights-of-way on property owned by City and includes a commitment to review and respond to any documents that require approval by City within five (5) working days of submission by Google.

And they have.

Of course, every other operator has now stated that if cities want them to build gigabit then they will need the same concessions and for the most part they have received them.

So, once again – Google moved that needle for everyone.

Mind share

Google Fiber single-handedly put gigabit broadband into the vernacular of the general public.  Prior to their entry in the market – consumers did not have a sense of what gigabit broadband could offer – but now they do – even if they can’t get it.

More importantly, Google Fiber made every other operator – cable and telco – become better at what they did and what they offered.  Since the introduction of Google Fiber – virtually all broadband operators have made significant investments within their networks to provide faster speeds, better services and improved customer satisfaction.

Gigabit Reality Check

What they did not anticipate was simply the physical nature of building a FTTH network – Labor is expensive and often slow and there remains a lot of unpredictability – especially, when entering the home and/or building.  As such, it is no surprise that Google Fiber acquired Webpass – to use a millimeter wave technology for the final mile.

In the past few years that Google Fiber has been around – they have never really disclosed how many homes they have passed and how many they have connected.  And perhaps, they are beginning to realize that their ROI is not happening on the timeline they anticipated.

Nonetheless, despite the disappointment that is now being felt by many communities that are being “paused” – it would be unfair to call Google Fiber a failure.  And I believe this quote sums it up best:

“Only those who dare to fail greatly can ever achieve greatly.” – Robert F. Kennedy

And while Google Fiber may not be achieving the success it had anticipated – the overall industry has greatly benefited from their willingness to fail.

#googlefiber

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