Google gets serious about rescuing broadband

U.S. broadband service is slow and expensive, but competition from Google will get us the speeds we really need

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Google Fiber now looks like a serious, sustainable business
The search giant had been experimenting with FTTH projects in several cities, notably Kansas City, but many analysts and observers (including me) didn't take the Google Fiber effort seriously. FTTH is very expensive to build, is burdened with regulatory hurdles, and requires that the provider offer a good deal of customer service and support, which Google has never done very well.

But in February, Google said it is working with 34 cities across the country to expand its FTTH service. Not all of those cities will ultimately get the service, but the move was a clear signal that Google want to compete with the carriers in major markets.

The announcement was met with some skepticism from analysts, but in early May the Bernstein analysts published a bullish report on Google's plans. They conducted a door-to-door survey of Google's first Fiber customers in Kansas City, which showed that Google could get 50 percent market penetration of its 1Gbps broadband service in the next three to five years with service that provides 100 times faster download speed than the U.S. average.

What's more, the Bernstein analysts said Google Fiber could be profitable and they believe Google is serious about the effort. "We don't think Google Fiber is an experiment, a regulatory ploy, or just a bluff to keep incumbents in check or get them to upgrade their networks. We believe the potential to build a large, profitable business is one of the main motivations for Google," they wrote.

AT&T has begun to ramp up its FTTH efforts, saying in April it may roll out 1Gbps fiber-optic service to as many as 21 new metropolitan areas, including Atlanta, Chicago, Los Angeles, San Francisco, and San Jose. It's hard to believe this had nothing to do with competitive pressure from Google.

Google's next broadband frontier may be in space
Could a fleet of satellites extend broadband to connectivity-short parts of the world? Google appears to think so, according to reports this week by the Wall Street Journal. The paper says Google plans to spend $1 billion on a fleet of satellites that would connect the unwired regions of the world.

Google didn't confirm the report, but it didn't knock it down either, saying, "Internet connectivity significantly improves people's lives. Yet two-thirds of the world have no access at all." The company is already spending big on Project Loon, an experimental project that uses balloons as devices to spread connectivity.

There are also widespread reports that Google is close to buying Skybox Imaging, a company that has launched one small imaging satellite into low-earth orbit and plans to launch 23 more. (I interviewed its co-founder John Fenwick recently.) Skybox plans to use the satellites to shoot high-definition images from space and sell them. The company's technology would be an obvious complement to Google's mapping and imaging businesses, but it could also be used to deliver broadband. Neither Google nor Skybox have commented on the reports.

Whether or not Google really plans to get into the satellite business, there's now no doubt that it's serious about moving into the broadband business. However, building out fiber networks will be a slow process, so don't hold your breath for 1Gbps broadband to come to your neighborhood. It'll take much longer than that to reach even the big cities.

Still, Google's entry into the business may well have the effect on broadband that T-Mobile's aggressive moves have had in the cellular market, where odious, two-year contracts have largely gone away and prices of some services have dropped sharply. (But competition in the wireless market may be sharply curbed if Sprint succeeds in buying T-Mobile USA, which news reports say is imminent, though the federal government has said it opposes such a merger.)

When companies like AT&T, Verizon, and Comcast have no serious competition, they do what they want -- too bad for those who don't like it. Thanks to Google, that's finally going to change.

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This article, "Google gets serious about rescuing broadband," was originally published by Read more of Bill Snyder's Tech's Bottom Line blog and follow the latest technology business developments at For the latest business technology news, follow on Twitter.

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