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They are using their position and cash to undersell all info, cable and internet providers.

Except they're essentially starting from zero infrastructure-wise. While the LECs just have to add incremental infrastructure.

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While the LECs just have to add incremental infrastructure.

Yes, however - look at the content provided up the infrastructure, and the infrastructure, as one big revenue/expense package.

The LEC's have to get content that some have some don't.
Google has all the content but no wire.

Each have the same cost basis if one wants to build into the other vertical channel, but GOOG has lots of cash. They are also beginning with no legacy issues. They will be able to build state of the art without POTS legacy.

Jackl wrote..

Comcast better watch the **** out.

Comcast's network sucks donkey balls. Not in terms of speed; it's OK in that respect, but in terms of reliability. We see this at our office at at my house in Montgomery County PA (where Comcast is our backup connection) and in western PA and Tennessee (where Comcast is the primary connection for some of my employees who telecommute most of the time). This crap is not inherent in being a cable ISP either. Down here in FL, I have Brighthouse and it's rock-solid. Verizon FIOS up in PA is also rock-solid.

-Uwe-

Pitz wrote..

just how does Google, a company with zero experience in telecom

2007: "just how does Apple, a company with zero experience in telephones make a case for making the crazy investment in the iPhone; the're crazy to think they can sell 10 million phones per year"

Pitz wrote..

This infrastructure isn't cheap. All-in costs of $5-$10k per household passed aren't unheard of.

True -- if you're a legacy telecom company which is stuck building infrastructure using union labor, but Google isn't.

-Uwe-

Fiber to the home WILL happen in most markets, the only thing that'll change is the ISP, from region to region. Having only one or two "competitors" in a market truly sucks, in terms of reliability, customer service, and the infrastructure. They're currently free to offer whatever crap they want, and really stick it to you, price-wise.

Having acknowledged all that, I still can't wait. Hell, I'd run the fiber to their box outside myself, if I knew how.

Fiber is cheaper longer-term to run than copper cable, as it does not deteriorate over time and is impervious to water intrusion and similar disruptions from natural causes.

However, it is more expensive to fix and somewhat more expensive to install in the first place.

The real 900lb Gorilla is that there is no way Google (or anyone else) can switch gigabit speeds on a N x M basis at the present time, and there won't be in the reasonable future either. This is particularly true when the desired endpoints are not distributed (that is, it's really (N x M) -> D not N x M)

The solution to that is a looooong way off.

But by entering the market now while they are flush with cash and establishing their fibre network now while labor costs are constrained in this economy, doesn't this put them in position in 7-10 years once the technological advances occur to solve the problems Karl describes, to simply swap the hardware at the end of these established lines. At this point the hardware would be due for an upgrade any how. I see this as more of Google leveraging our poor economic situation to develop and quickly expand their network now. Cheaper materials, cheaper labor. All In hopes that the economy will come back to life at some point in the future, even if it is several decades down the road. As Karl pointed out. Fiber has a long life once installed.

Maybe. That's their gamble, but I'm not particularly confident it will pay.

Any obvious buyout opportunities in line with this?

Goes google have a big center in kansas city already?

Not really.

There have been recurrent rumors that Sprint might be in play but I discount them.

Who's laying the fiber for this? Any thoughts about them looking at building the network in-house?

I know google's internal network is quite exceptional, do they lay any of their own fiber already? What about between data centers?

Sorry, just curious, and not sure where to go to find that information - if it's even availible.

MASTEC and similar.

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but GOOG has lots of cash.

Parked overseas, pre-tax. They had to take out a mortgage to buy a mere $2B building a year or two ago in NYC.

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The real 900lb Gorilla is that there is no way Google (or anyone else) can switch gigabit speeds on a N x M basis at the present time, and there won't be in the reasonable future either. This is particularly true when the desired endpoints are not distributed (that is, it's really (N x M) -> D not N x M)

Do they really need to? A significant chunk of the traffic (probably most of it) would be structured multicast streams (for TV purposes), and the rest probably wouldn't be a lot more severe than what the current DSL ISPs experience. Obviously nobody provisions routing/switching capacity at 100% loading of all endpoints on any network.

Google has the expertise and quite a bit of experience in using cheap off-the-shelf hardware to do enterprise-like tasks. Wouldn't surprise me if they implemented clusters of $150 PCs to do routing instead of the big $$$$ Cisco iron.

Well, no they don't "need to", but the premise they are selling is that they can -- and they can't.

Pitz--Google has $54B in Short term assets with only $17b in short term liabilities + long term debt. The fact that a large portion of their cash is overseas isn't a surprise--this is true for apple and most companies.

Kansas city was supposedly chosen for the test bed because they're able to have city and rural use cases in the same area. I think that they'll stay limited to one location and slowly expand as they work out the issues and get caught up to speed in how and what are the best practices in running a large scale fiber ISP

In other words, don't have expect to see this in your town any time soon, unless you live in Kansas City.

from their copy,

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"We announced that Google Fiber would be coming to Kansas City, KS first, which gave us a head start on our work there. We'll begin building Fiber to homes in Kansas City, KS first, but we plan to have service to fiberhoods in Kansas City, MO in early 2013."

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"We expect to connect everyone who has signed up for a Fiber package no later than the end of 2013."

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"But, barring these circumstances, we expect to install service to fiberhoods ranked in the top 50% by mid-2013. "

so i wouldn't cancel your internet service contract just yet...

Bumping this thread for an update:

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Two Analysts Just Went To Kansas City To Check Out Google Fiber—And They Were Blown Away

Two analysts from BTIG Research went to Kansas City to see what Google's new cable-company killer, Google Fiber, is like.

What's it like?

It's awesome.

The Time Warner Cable system in Kansas City appears to be freaking out about the rollout of Google Fiber, and for obvious reasons. Google Fiber puts the Time Warner Cable offering to shame.

The analysts, Rich Greenfield and Walter Piecyk, have written a detailed report about how Google Fiber works and what the TV and Internet experience is like. The report is available at BTIG's site (registration required).

http://www.businessinsider.com/heres-wha....

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Here's Why You Will Instantly Dump Your Cable Company To Get Google Fiber

Google Fiber will soon be a viable cable alternative in many neighborhoods in Kansas City.

Hopefully it will also soon become an alternative in every city.
For $120 a month, Google Fiber brings you normal cable TV, a massive digital video recorder, and broadband Internet access that is 100-times as fast as your cable company's.

For $70 a month, you can get just the Internet access.

If that's not enough, there's one promise Google is making that will make cable customers everywhere jump for joy.

Google is promising that its installer will arrive when he or she says he will arrive — not force you to stay home for hours for an appointment "window."

http://www.businessinsider.com/google-fi....

They're nuts for running that **** on poles with all those trees around. Splicing/repairing a major fiber cut is NOT a trivial thing! A tree going over one of those lines would be a killer for a street/neighborhood. A drunk/bad driver+weak pole isn't good either. Each and every one of those poles costs monthly rent too - to who ever owns them(usually the power company).

With fiber, underground is the way to go, as long as humans with incorrect/incomplete information doesn't cut the ****, and that happens A LOT!. Fiber is immune to water damage(unlike copper). You put it in the ground and it lasts forever. Just build in enough redundant strands for scalability.

And for the cheapskates, 5/1 service is FREE. OK, there's a one-time $300 (or 12 monthly payments of $25) charge, but there's no data caps and free service guaranteed for at least 7 years.

Competition is wonderful. In this area where we have two providers duking it out, we can get 300/65 from VZ and 105/20 from CMCSA. Both are overkill for the average residential user, IMO.

-Uwe-

I would worry that Google will sniff every packet you send or receive to data mine you.

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I would worry that Google will sniff every packet you send or receive to data mine you.

Is there an ISP that doesn't have the traffic on it's network being analyzed?

remember those server rooms found by Mark Klein?

http://en.wikipedia.org/wiki/Room_641A