Google Fiber's About-Face Provides Useful Lessons For A Broken Broadband Industry

from the don't-build-your-house-on-a-swamp dept

Thu, Mar 16th 2017 6:27am — Karl Bode

Last fall, Alphabet/Google announced that the company would be notably scaling back its Google Fiber ambitions. The company axed its CEO, laid off a small number of employees, and froze a number of anticipated fiber builds (in Portland and a few other locations). Numerous reports indicated that there were growing concerns among many executives about the high costs and slow pace of deploying fiber, so the company was considering an overall pivot to next-generation gigabit wireless while it continued building out most already-announced markets.

While it's hard to call this pivot a failure until we see a real wireless product, ISPs like AT&T were of course quick to suggest Google Fiber was little more than folly (ignoring that AT&T's anti-competitive behavior played a starring role in Google Fiber's struggles in many cities). This has contributed to an overall air of "we told you so" smugness emanating from numerous quadrants of the telecom status quo.

That take, however, is short-sighted. One, the launch of Google Fiber put an unrelenting spotlight on the lack of broadband competition in countless markets, driving many large ISPs (like AT&T) to deploy gigabit broadband service that had previously been unheard of. Google Fiber also managed to shine a bright spotlight on the way many large ISPs use our broken legislative and regulatory systems to keep things broken, whether that's by using utility pole beaurocracy to slow competitors' installs, or writing awful state protectionist law hamstringing what your local town and city can do about it.

Over at Backchannel, long-standing duopoly critic and Harvard Law Professor Susan Crawford notes that there are a lot of useful lessons from Google Fiber, most notably that the system Google Fiber is operating in is effectively rotten to the core:

"The fundamental lesson of Google Fiber is that, in the end, its business model was just like that of another cable actor. It was playing within the existing sandbox, using the right technology but the wrong business model.

That sandbox has been left to the vagaries of the marketplace, in which existing monopolies have built moats around their businesses in the form of rights to programming, rights of way, bundled products, relationships with credulous legislators, and a million other barriers to entry that make competing — even for Google — just too expensive for shareholders looking for immediate, media company-like returns, quarter after quarter."

The solution, Crawford insists, is a shift toward local, municipal, open access networks via which ISPs come in and compete:

"The only business model for fiber that will work to produce the competition, low prices, and world-class data transport we need — certainly in urban areas — is to get local governments involved in overseeing basic, street grid-like “dark” (passive, unlit with electronics) fiber available at a set, wholesale price to a zillion retail providers of access and services. There’s plenty of patient capital sloshing around the US that would be attracted to the steady, reliable returns this kind of investment will return. That investment could be made in the form of private lending or government bonds; the important element is that the resulting basic network be a wholesale facility that any retail actor can use at a reasonable, fair cost.

The result: Instead of different wires competing side by side with one another, there would be one great basic facility available neutrally to every form of business. Your ISP could use that fiber in competition with 10 others; your traffic lights could use it to govern congestion; your energy grid could use it to measure and regulate consumption and use of renewables. (Here comes the much-touted Internet of Things, which, without fiber everywhere, is being built on sand.) At the same time, the government would stay out of providing and inventing retail services itself."

Data, including data from the FCC (promptly ignored by the agency) does support the argument that such open access networks result in better broadband, better customer service, and lower prices thanks to real competition. In fact, Google Fiber initially insisted it would support the open access model -- before promptly backing away from it. And some areas, like Huntsville, Alabama, are following through on building an open network, then inviting multiple ISPs (including Google Fiber) to come in and compete.

More competition means organic punishment for high prices, bad service, and net neutrality violations -- which in turn means fewer attempts to fix this issue using often ham-fisted attempts at regulating a moving train.

The problem: incumbent ISPs effectively run massive chunks of our government, to the point where they quite-literally write telecom law (usually via ALEC or some other third-party, legislation ghostwriting apparatus). That includes the twenty-some odd state laws preventing towns and cities from making telecom infrastructure decisions for themselves, lest they might upset somebody at AT&T, Verizon, Charter or Comcast.

Like so many sectors, you can't really fix what ails the broadband industry until you fix the underlying legislative rot that lets companies use campaign contributions and disinformation to dictate garbage technology policy in the first place. So sure, open access networks should absolutely be pursued where possible, but voting out politicians whose entire function appears to be to protect broken mono/duopoly markets (looking at you, Marsha Blackburn) would need to be the very first step in what's an achievable but Sisyphean climb toward better broadband.

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Filed Under: broadband, competition, google fiber, muni broadband, susan crawford
Companies: google

31 Comments

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Ninja (profile), 16 Mar 2017 @ 6:10am

I would argue for at least a second redundant network ran by different folks than the first. I'd also argue the deployment should be mandated to anywhere within determined conditions such as radius from the center of the towns, population density and possibly others with farther places attended by wireless solutions when deploying the physical solution gets too onerous comparing to what's going to be earned from providing the service.

But every infra-structure should be treated the same: one single network (either with a second redundant one or ways to provide the service from different links like some electric grids) that many companies can operate in. I'd argue it should be owned by the Govt and maintained in a concession model but that could be too Commie for some.
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Anonymous Coward, 16 Mar 2017 @ 6:41am

Re:
If you mean federal government then yes... that is too commie for me. If you meant state or below then I am fine with that.

The last mile should be owned by the owners of the property and not by companies.
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Not an Electronic Rodent (profile), 16 Mar 2017 @ 6:52am

Certainly an impovement

the important element is that the resulting basic network be a wholesale facility that any retail actor can use at a reasonable, fair cost.

That sounds sort of like the situation here in the UK - BT Openreach, who own all the pre-existing and therefore the lion's share of last-mile delivery are forced by regulation to rent lines to any ISP/telecom at semi-"reasonable" rates or to allow co-lo installation of competitor's cabinets in their exchanges if they want to provide their own last-mile delivery. BT retail is at least theoretically a separate company and has to take lines from BT Openreach on basically the same pricing model as anyone else.

Doesn't quite work and it might have been better if the infrastructure were directly publicly regulated instead of being privately owned, since the relationship between BT retail / Openreach is still a little too cosy to make it truly competitive... but at least the situation is way better than the US sounds - there are usually at least 4 ISPs to choose from even in most rural areas. (Though obviously fiber investment is kinda slow in the sticks)
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PaulT (profile), 16 Mar 2017 @ 7:17am

Re: Certainly an impovement
"the relationship between BT retail / Openreach is still a little too cosy to make it truly competitive"

Is that before or after the recent decision to enforce a definitive split? Time will tell, but hopefully things are going to improve.
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Not an Electronic Rodent (profile), 16 Mar 2017 @ 7:26am

Re: Re: Certainly an impovement

Is that before or after the recent decision to enforce a definitive split?

Before; direct experience of dealing with Openreach and quite a number of different ISPs, which is not bang-up-to-date. I share the hope that the board split will help, but the cynic in me doubts it somewhat since the money will still come together at the top and I suspect money will end up talking as usual.
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Anonymous Coward, 16 Mar 2017 @ 7:37am

Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home":
https://www.techdirt.com/blog/netneutrality/articles/20151001/06351732404/isp-announces-blocking-all -facebook-google-ads-until-companies-pay-troll-toll.shtml

Was that you lying on your own, or just repeating Google's lies? -- Either way, your cred is zero.

"Google Fiber initially insisted it would support the open access model -- before promptly backing away from it" -- Yup. And yet like Google's reverse on net neutrality, and this very abandoning of what you've so often and insistently trumpeted, doesn't dim your enthusiasm for the multi-national spy agency. Why is that?

"following through on building an open network" Means taxpayers just subsidize private profits instead of then having a public utility; in a word: FASCISM. (All complaints about bad public utilities simply mean that you've fallen for capitalist lies that such subsidies for them are somehow a "free market".)

"you can't really fix what ails the broadband industry until you fix the underlying legislative rot" -- actually, you can't fix "capitalism" until heavily suppress The Rich (as was done through the 1960's with NINETY percent income tax rates! yet all the trend lines were going right way), else they simply use money as a weapon against The Public.
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Anonymous Coward, 16 Mar 2017 @ 7:39am

compete? are you kidding?

we are capitalists. we don't believe in competition. capitalists carve up markets into monopolies and handshake duopolies. that and make fatcat government fatter by the handshake.

all the things our forebears sat up nights worrying about we've embraced like the drowning hug a log.
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Thad, 16 Mar 2017 @ 7:48am

Re: Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home":

Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home":

And a year and a half ago, it was.

"Last year, Abe claimed to be 15 years old. This year, he claims to be 16. Which is it, Abe?"
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PaulT (profile), 16 Mar 2017 @ 7:48am

Re: Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home":
"Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home"

...which was true at the time it was stated, if not now (and are they not now? Source?).

Do you now have a problem with verifiable facts? Well, so long as they get in the way of your obession with certain people, of course.

"in a word: FASCISM"

Dictionaries are available to define the scary words you mix up.
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Thad, 16 Mar 2017 @ 7:52am

Re: Re: Just year and half ago, you stated "Google, which is spending billions on wireless service and fiber to the home":

Dictionaries are available to define the scary words you mix up.

Words can mean more than one thing, though. No less an authority than Benito Mussolini defined fascism as a merger between the state and corporations. In that sense, I do believe our current form of government has fascist tendencies in the form of serious overlap between government and industry.

But you're right that fascism is typically used in a broader social sense, to define government behavior that props up charismatic leaders, oppresses minorities, favors strong police and military, etc. (I'd say our government's got some real problems with that sort of fascism, too.)
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ShadowNinja (profile), 16 Mar 2017 @ 7:55am

Re:

I would argue for at least a second redundant network ran by different folks than the first. I'd also argue the deployment should be mandated to anywhere within determined conditions such as radius from the center of the towns, population density and possibly others with farther places attended by wireless solutions when deploying the physical solution gets too onerous comparing to what's going to be earned from providing the service.

In other words, we should just admit the free market has failed and replace it with the government. Or alternately heavily regulate the private companies like utilities (which had a lot of the same lack of competition issues in the past).

There's certainly times when the free market works out better. But the current state of the ISP market and rampant abuse of their dominant positions by companies like Verizon and Comcast has proven that this is one of those cases where the free market just doesn't work.
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Thad, 16 Mar 2017 @ 8:07am

Re: Re:

we should just admit the free market has failed

I'd say it's not so much that the free market has failed as that we've never had a free market in terms of broadband internet in this country.

I'd be all for anything that increases competition, whether from government or the private sector.
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Anonymous Coward, 16 Mar 2017 @ 8:26am

Re: Re:
No, the free-market was killed by the FCC and "regulation" BEFORE the internet even existed.

But don't let a few paltry facts dissuade you from making ignorant and false accusations for your political brownie points. So keep right on blaming the free market and capitalism for the problems they did not cause. You will definitely find plenty of ignorant people to agree with you. Just be aware that you will be regarded as a fool with a big mouth willing to prove it.
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Thad, 16 Mar 2017 @ 8:42am

Re: Re: Re:

No, the free-market was killed by the FCC and "regulation" BEFORE the internet even was created by the government.

FTFY.
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Anonymous Coward, 16 Mar 2017 @ 8:58am

Re:
capitalism does not pre-clude competition. Sure it desires monopoly, but capitalism is hardly the only ism that seeks monopoly or encourages it for that matter.

The desire for monopoly is a product of greed, money, power, and control, which are all circular in this purpose. Blaming capitalism for a problem that capitalism does not cause is ignorance. Capitalism does not cause monopolies it just has no safe guards against them. Which is the SAME problem with 'current' ideas on regulation... it is an artificial control that has generally proven to work very poorly because it 1. Pulls the public's chair away from the bargaining table under the guise of giving it one, and 2. facilitates that which it was intended to prevent, because everyone just magically thinks that politicians cannot be bought and they are certain to look after their voters interests despite the history of Earth proving otherwise.

Humanity has been in a constant war with the lowest common denominator and giving them all the cards. You want a problem solved? Pay someone who cares less about you to fix it. Have a fear? Well step right this way... vote for me and I will fix it for you har har har. Foreign enemies? Well let me just create this law to keep you safe, heh heh heh... Is that company poisoning your land? Well let us fine them for ya? yes just ignore that no one is going to jail, but at least uncle same collected some opportunity taxes for your miseries...

Yea... Capitalism is soo evil and government with their regulation is just a righteous savior!
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Thad, 16 Mar 2017 @ 9:27am

Re: Re:
tl;dr a "Look over there!" post that ends with a strawman.
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Socrates, 16 Mar 2017 @ 10:49am

Infrastructure
One of the fundamental problems with letting corporations insert themselves in infrastructure positions is the almost deterministic abuse it causes. It's sometimes described as "cashing in on an opportunity".

It is seen even in égalitarian societies like Sweden where tiny parts of the electric grid is privately owned, and it is abused.

It is also seen in égalitarian societies like Norway where tiny parts of the charging structure for electric cars is occupied by a corporation with a ludicrous drop-in price. It hampers adoption of electric cars, and it harm individual EV-owners that does not have a choice.

And Nordic nations have an ingrained resistance to such abuse.

But expensive infrastructure can't be moved around at will, and the abuse lingers on.

.

In USA it is much worse. It have corporations with full time employees billing rape victims having been so brutally raped they were hospitalized. The onslaught depend on victims being too downtrodden to refuse. In USA this is legal.

In USA there is hundreds of thousands of unanalyzed rape-kits laying about. The $500 to $1500 to analyze them is deemed not "worth it" by the police. Even though it is an extremely efficient method of identifying serial rapists. Serial rapists often rape spouses to, making it even more efficient. It would help a massive amount of 99%-ers, both victims in regaining their life and in preventing future victims.

There even is entire "industries" dedicated to leaching, like patent trolling.

And scams spanning entire "industries" like "hollywood accounting". And it is allowed to go on unabated.

.

Then, it should not come as a surprise that a commercial entity in USA given an infrastructure position abuses it systematically.
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Anonymous Coward, 16 Mar 2017 @ 12:37pm

Re: Re: Re:
ends with sarcasm... my apologizes to confusing those with a simple mind. I shall endeavor reword my posts so that juveniles might be able to understand them better.

Naw... just kidding... go and get and education instead. It will work out better for all of us that way.
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ECA (profile), 16 Mar 2017 @ 12:53pm

AND then...
Love the thought that a BIG corp wishes to Make things better, and the OTHER CORPS jump in to make things WORSE..

SOP=Standard operating procedure.
KEEP things as they are, DONT change what we created Years ago..WE created this MESS, and NOW you have to deal with US ONLY..

The Dissolution of Ma Bell? was NOTHING, and (REALLY) nothing has been DONE..
Take the TOP 5 corps, and then you make YOUR OWN subsidiaries.. Use them as playing cards, and sell and buy BACK and FORTH to confuse ALL kinds Taxes and WHO OWNS WHOM..
The PROBLEM is that 1 groups OWNS it STILL OWNS it all..
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ECA (profile), 16 Mar 2017 @ 12:56pm

Re: AND then...
What would GET google ON TOP??
EASY..
After all the winter storms..the ROADS really need to be FIXED..
Go out and FIX THEM along with Laying your OWN LINES..

Even if you DONT get the service in the AREA...TELL the CORPS they have to BUY those lines to UPDATE THEIR OWN SYSTEMS..
(WHICH, the gov has paid for ALREADY(twice) as well as NY wanted done YEARS AGO..)
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orbitalinsertion (profile), 16 Mar 2017 @ 12:58pm

Re: Re: Re:
There is no such thing as a free market.
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orbitalinsertion (profile), 16 Mar 2017 @ 1:11pm

Re: Re: Re: Re:
We can identify sarcasm. It is also a strawman.

"Capitalism" is also a strawman, because regulation or no, capitalism as practiced does not operate on the theory which gives it its name.

Jefferson was correct about corporations.
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Damian Ivereigh (profile), 16 Mar 2017 @ 1:30pm

The proposed model is similar to the NBN in Australia
For the last few years we have had the government rolling out the NBN here. It doesn't provide dark fibre but more like a metro-ethernet - where each end-user gets four ethernet sockets and they can light those up by talking to a retail service provider, who then essentially rents the last-mile access on the NBN network. The NBN takes the connection (technically a vlan) to a local Point-of-Interconnect where the service provider picks it up.

It is not without it's problems, unfortunately it became a political football and after a change of government, the (almost) all fibre rollout has been scaled back to other technologies. The pricing structure is controversial to say the least.

The problem we have here in Australia is that there is still too little competition in the backhaul market, so data transmission is expensive (which arguably is the opposite problem from the US, which has too little last-mile competition). Then there is Telstra who refuse to peer with anyone...
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Ryunosuke (profile), 16 Mar 2017 @ 1:35pm

Rule Number One:
DOn't shit in the public sandbox where kiddies play.

Rule two: don't be drunk enough that you do take a shit in the public sandbox.
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Thad, 16 Mar 2017 @ 2:06pm

Re: Re: Re: Re:

go and get and education instead.

You're awfully obsessed with education for a guy who can't even spell "an" correctly.
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AC, 16 Mar 2017 @ 2:07pm

Boy Scouts to the rescue
Let Eagle scout projects include digging a trench and filling it with conduit. Then get out the popcorn and watch the show where Comcast tries to take down the Boy Scouts and accuse them of evil doing. Ha Ha Ha...
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AC, 16 Mar 2017 @ 2:09pm

Boy Scouts to the rescue
Let Eagle Scout projects include digging a trench and filling it with conduit. Then get out the popcorn and watch the show where Comcast tries to take down the Boy Scouts and accuse them of evil doing. Ha Ha Ha...
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AC, 16 Mar 2017 @ 2:25pm

Boy Scouts to the rescue
Let Eagle Scout projects include digging a trench and filling it with conduit. Then get out the popcorn and watch the show where Comcast tries to take down the Boy Scouts and accuse them of evil-doing and being mean to hardworking, good-hearted private-sector companies. Ha Ha Ha...
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Andy, 16 Mar 2017 @ 6:43pm

FUN FUN FUN!
I doubt that google is just going to sit back and take this, they will probably have multiple new technologies that could easily destroy the incumbents and force them out of the broadband market. Lets wait and see what happens over the next few years while they perfect their new innovative means to supply unlimited fast broadband to consumers.
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ECA (profile), 16 Mar 2017 @ 11:02pm

hOW IS IT..
not A CONSPIRACY if we can see it?
Not a monopoly if we can see it..

I really thought there were LAWS against SOME of this stuff..
The PROBLEM is Proving it..
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Ninja (profile), 17 Mar 2017 @ 3:51am

Re: Re: Re:
That would be more correct. But free market will eventually fail when we put the human factor in it. You see, even disregarding the markets where the entrance costs are insanely high that only a few large companies can dip their toes you have market concentration everywhere. It's been a tactic for instance for large supermarket chains enter an area and keep the prices low at losses to kill the competition. Because they can absorb the losses, the local competition usually can't.

It's not that there isn't free market at work, far from it. But sometimes it works precisely where there are regulations to level the playing field.
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