Google’s One Year Fiberversary: Market Impact Not Yet Quantifiable but Immeasurable

Work men fixing road

On July 27, 2013, Google Fiber will celebrate its one-year Fiberversary (their words, not mine!) of its official services launch in the Kansas City market. So exactly what has Google Fiber accomplished in year number one?

When I think of Google, words such as innovator and disruptor come to mind. Whether it is the self-driving car, Google Glass, or the future Google TV; there has been no lack of attempt to change how consumers live, work and play - and Google Fiber is no exception.

Yes, there are other operators that have been offering 1Gbps broadband services longer than Google; but Google Fiber has done more to plant 1Gbps into the consciousness of both consumers and competitors’ minds than any other operator in any market.

Prior to Google Fiber – most consumers simply had no concept of the difference between 1Mbps, 10Mbps, 100Mbps and 1000Mbps – except to know that one is incrementally faster than the other. Now 1Gbps is the target for most municipal broadband projects and is certainly on the roadmap for most operators.

So let’s take a look back on year one.

Changing the Business Model

One of the areas where Google took a non-traditional approach was in the build-out. The first step was to divide the city into “fiberhoods” of 250-1,500 households and set a customer participation goal (anywhere from 5 percent to 25 percent) based on the following:

  • 5 percent: areas will be easy to build and install.
  • 10 percent: areas that will be more complicated to build and install.
  • 25 percent goal: areas that will be the most complicated to build and install.
Second, to motivate consumers, Google Fiber prioritized construction build out as follows:

1. Service will only be built in fiberhoods that meet their pre-registration goal

2. Those with the greatest participation will be built first.

Did it work? In its first market, Kansas City (both Kansas and Missouri) – 180 out of 202 fiberhoods met their participation goal – meaning 1Gbps broadband would be available to 89 percent of the consumers in this market. Construction began in December 2012 and as of July 2013 – two fiberhoods were connected; 43 were in progress, while the bulk of fiberhoods are schedule to be built out in the fall of 2013. In the initial build (Kansas City) Google Fiber will pass 149,000 homes (57K in Kansas and 92K in Missouri).

Actual subscriber data has not been made public, but it is likely to be less than 2,000, given the current availability.

This “build to demand” model may in fact be the best model for FTTH deployment in an overbuild scenario.  This allows operators to prioritize their capital spending in markets where they will be able to achieve their best ROI and it will be these early markets, with high take rates, that will likely fund expansion of FTTH networks over time.

We are not in Kansas anymore, Dorothy!

Google Fiber has wasted no time rapidly expanding its services in markets surrounding Kansas City.  To date, Google Fiber has announced 12 adjacent markets (six additional markets in both Missouri and Kansas) as well as entry into Austin, TX and Provo, UT.

Service in Austin is expected to start in mid-2014, while Google is leveraging its asset purchase of the iProvo network to start offering services by the end of 2013.  Service availability in adjacent Kansas City markets has not been announced.

Year 1 Status

The two main objectives of Google Fiber were as follows:

  • Next generation applications: Google wants to see what developers and users can do with ultra-high-speeds, whether it's creating new bandwidth-intensive "killer apps" and services, or for uses that have not yet been imagined.
  • New deployment techniques: Google wants to test new ways to build fiber and operate fiber networks and will share key lessons learned to support deployments elsewhere.
So how have they done?

Next-Generation Applications

Google’s entry into the 1Gbps broadband arena has helped to provide significant momentum behind projects such as US Ignite and its’ Mozilla Ignite Apps Challenge – which recently announced the winners of its 12-month open innovation challenge for prototype apps that were designed to run on next-generation networks with speeds of up to one gigabit per second .

One of the winning apps is the Software Lending Library.  This app will allow users to “check out” applications hosted by the library and hopes to offer high end (and often expensive) productivity software such as Microsoft Office, Adobe Photoshop and Adobe Premier to users at anchor institutions such as schools and libraries.

Overall, 22 apps were selected across Advanced Manufacturing, Education and Workforce Technologies, Emergency Preparedness and Public Safety, Healthcare Technologies, and Clean Energy and Transportation.

The next step is to trial many of these apps.  Unfortunately, the availability of 1Gbps connections remains limited.

New Deployment Techniques

Overall, it appears that there is nothing particularly innovative regarding Google Fiber’s deployment techniques.  For Kansas City, it took Google Fiber approximately six months to complete its detailed engineering plans prior to starting construction of the backbone – which entailed building the fiberhuts and running fiber cable in the distribution portion of the network.

From an installation perspective, it is taking Google approximately 3-4 hours for each install and each crew is installing 2-3 homers per day.

Google did file a patent in the U.S. at the end of 2011 for a narrow edging strip in which the fiber cable is embedded into the strip and then pushed into the ground.  The edging could be made out of a variety of different materials that would support various environmental factors and it could also be made to support bending as well as support for single and multiple fibers or other types of cable such as coaxial.

According to the patent application:

"The edging device may have decorative color or pattern on the outside surface for aesthetic purposes," Google says in the patent application, adding that "different styles of coatings may be separately available to the customers."

A diagram Google includes in the application shows an edging device that is concealed at the edge of a subscriber's driveway, running from the street to an optical network terminal (ONT) attached to the side of a home.

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At this time it is unknown if Google is actually using this type of device for the drop cable.

Small business continue to be denied the opportunity for Google Fiber as the service was designed and developed primarily for the residential market. Key elements missing for business service include no service level agreements, no viable voice option and the fact that Google Fiber does not allow servers on its network. Nonetheless, there is clearly enough demand from small businesses, so it waits to be seen how Google Fiber choses to approach this market segment.

Google Fiber Impact

Google Fiber’s impact has been far greater than the number of households it has passed and the number of households connected. While its impact may not be quantifiable – it has been immeasurable, building awareness across the board (and oceans) regarding the potential economic benefits of a next-generation telecommunications infrastructure and the imagination it can ignite.

 

 

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