We’re not in Kansas anymore…

google-fiber-austin-texasNo we’re in Austin, Texas too! That’s the message from Google, which has announced that its ambitious Google Fiber project will be coming to Austin, Texas, and the city is understandably pretty pleased with the news.

The news has brought focus back onto Google’s ground breaking, innovative project that some have suggested would disrupt the broadband, telecoms and TV markets in the US, and concomitantly worldwide.

However, there’s little reason to assume that Google will be extending its Fibre cities at any great pace. The strength of Kansas City’s infrastructure, and the hands off approach of its leaders were the key reasons that Google came to Kansas City in the first place but according to this source, it still cost $84 million to rollout for just 149,000 homes. An estimate to roll it out across the US is $140 billion, – even rival Apple, with its mountainous cash reserves couldn’t afford that. Thinking about that and the logic of using LTE Advanced for fixed wireless broadband starts to become clearer. So it’s not going to happen, at least while the costs for rolling out infrastructure remain so high.

There is at least some evidence that Google is affecting the market. As Techdirt has pointed out, no sooner had Google announced its Gigabit fibre project for Austin, the AT&T released a rather reactionary press release, claiming that it too would bring 1Gb fibre to Austin, as long as it too obtain the same terms and conditions as Google on rights to infrastructure. Techdirt is pretty down an AT&T for this, inferring that this is proof that AT&T is inly willing to offer a competitive service where there is actual competition – otherwise it is happy to offer as poor a service as it can get away with. (So monopoly bad  – competition good. Sounds quite Thatcherite).

However, there has been concern that Google was rushing in without really understanding what it is that people will do with an access pipe of 1Gb/sec of data. In its promo video, a local entrepreneur describers the roll out of Fiber as a “a huge bet on human creativity.”

The more cynical might say that the main benefit is letting people watch more TV.

Netflix recently announced which were the fastest ISPs around the world for accessing its streams and, not surprisingly Google Fiber came top of the pile. I’m mean, seriously, though. If I had Google Fiber and it wasn’t top of the list for Netflix speeds, I’d be hunting for the receipt. The average speed in March for Netflix on Google Fiber was reportedly 3.45Mb/s. (It seems logical to assume the bandwidth limitation here is Netflix, and it’s variable bit-rate of its streams than Google Fiber, which would be more than capable of maintaining Netflix’s maximum bandwidth streams of 5Mb/s at all time).

I also note that Google Fiber is quite expensive. It’s $70 for the internet 1Gb connection and 1Tb of cloud storage, without the TV box and the 1TB storage box. That compares to Virgin Media in the UK charging £27 a month for a 100Mbs connection. It’s not bad value at all when you compare the speeds that you get, but it’s still a fair chunk of change out of a monthly budget.

The justification will come from what consumers and businesses will get out of it, or rather, keeping in mind Google aspirational, entrepreneuring spirit, what they will make out of it. Kansas, Austin – it’s up to you to impress us. The world is watching. No pressure.

Kevin Lo, General Manager of Google Fiber, will be a keynote speaker at the Broadband World Forum 2013, to be held in Amsterdam on 22nd-24th October. For more information and to register, please visit www.broadbandworldforum.com.

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