Why is fiber to the home so costly? In a word: shovels. Digging trenches for the new cables in an urban environment is labor-intensive and hugely expensive. Although Google says it was able to use existing telephone poles to carry its fiber in Kansas City, that's not possible in many cities and affluent suburbs where utilities have long since been moved underground. What's more, cutting deals to use poles and maybe underground cable ways could be difficult once the companies that own them -- that is, the telcos and cable companies delvering DSL and cable TV service -- decide Google is a significant competitor.
Google, of course, is very large and can use its scale to buy fiber and equipment at excellent prices. But so can Verizon, which has stopped expanding its fiber-to-the-home efforts. Even with its scale advantage, Verizon still lost about $800 per subscriber on its fiber deployment, says Timmerman.
The cost to customers is also high
Less tangible but still significant is the difficulty of running a consumer business, an area in which Google has little experience. Indeed, when it tried to enter the smartphone business directly with the Nexus One two years ago, it failed miserably. Although carriers like Verizon and AT&T aren't winning many popularity contests these days, they have huge networks of highly experienced technicians and customer service reps who know how to keep a network running and to manage a customer base.
Plus, when fiber to the home is built, it's very expensive for the consumer. The fiber network in Chattanooga, Tenn., which is owned by the city in partnership with Alcatel Lucent, offers gigabit Internet, but it costs $350 a month. Google's gigabit Ethernet plan in Kansas City runs just $70 a month, but it's obviously subsidized very heavily, and it's hard to imagine it going national at anywhere near that price. The effective speed of Google's gigabit Internet service is unclear, but it's likely nowhere near 1Gbps; early reports suggest it's between 500Mbps and 700Mbps. That's 10 times or more faster than what FTTN can deliver -- but FTTN can actually be delivered to nearly everyone, whereas fiber to the home simply cannot.
The advantage of FTTN plus vectoring is certain: It takes advantage of the existing copper wiring that connects nearly everyone in the country (with the exception of some rural areas) to the Internet, and there's no digging involved. There are of course adjustments to the network, including the installation of cards equipped with vectoring chips in the cabinet. But the economics are better.
Add all that up, and the idea that Google's gigabit Internet experiment will shame or terrify the carriers into installing fiber to the home is laughable. If you want gigabit Internet, you'll have to move to Kansas City or Chattanooga. But with new technologies extending the life of DSL, you'll get all the speed you need at a price you can afford -- and not have to relocate.
This article, "You'll never get Google Fiber -- but you don't need it anyway," was originally published by InfoWorld.com. Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at InfoWorld.com. For the latest business technology news, follow InfoWorld.com on Twitter.