Google Fiber claims a small victory amid a larger defeat

FCC refutes AT&T’s argument that pro-Google Fiber rules are invalid, but does little to shake the incumbent’s hold on the broadband market

Google Fiber claims a small victory amid a larger defeat
Ramdlon (CC0)

Google Fiber won a victory of sorts this week when the FCC refuted AT&T’s claims that utility pole reform was illegal. But why does that win feel more like a requiem?

The FCC slapped down AT&T’s argument that reforms passed by Louisville, Kentucky, conflicted with federal pole-attachment rules. The city had passed One Touch Make Ready rules in an attempt to cut through AT&T’s stalling tactics; it was taking as long as nine months for the incumbent ISP to prepare utility poles so that Google Fiber could attach new wires for its high-speed, 1-gigabit internet service.

Unwilling to accept the new rules—and a new competitor in town—the telecom sued Louisville to deny Google Fiber quick access to poles and obstruct its entry into the market. It filed a similar suit against Nashville after it passed OTMR reform. As Susan Crawford has said, “This is not really about poles at all.... Pole shenanigans represent an exercise of raw, entrenched power.”

Google has noted the massive backlog of pole work in places like Nashville. After months of waiting, only 33 utility poles out of the needed 44,000 had been made ready. These significant delays “[aren’t] just about Google Fiber, but are a major hindrance to future innovation for anyone looking to build a new network,” Google said.

The FCC has repeatedly denounced the lack of competition in the U.S. broadband market, while also acknowledging it does not have the resources or authority to do much about it.

Which is why so many were rooting for Google five years ago when the tech giant promised to shake up the broadband market with reasonably priced high-speed internet access and began laying fiber-optic cable in Kansas City.

But infrastructure is expensive, and bureaucratic nightmares have taken their toll. After sinking at least $6 billion into Fiber, Google announced last week that it was ”pausing” its expansion in 10 cities and laying off staff.

“Google believed it could revolutionize the laying of fiber. It didn’t just think it could offer a kickass service; it thought it could deploy much cheaper and much faster than anybody else had ever done,” Ars Technica says. “[But] Google is finally admitting (in a roundabout way) that despite all the clever people it has on hand, the company hasn’t revolutionized fiber deployment.”

Veteran Google exec Jonathan Rosenberg has been tapped to help get Google Fiber back on course. While fiber rollouts will continue in San Antonio and Austin, and Google Fiber says it remains committed to bringing high-speed internet to Louisville and Nashville, bets are that the division will reevaluate its mission and presumably focus more on wireless, a less capital-intensive way to deliver high-speed internet service.

This strategy would be in line with Google’s acquisition of broadband provider Webpass, whose technology eliminates the need to string wire from utility poles or deploy fiber inside buildings. WebPass targets multi-unit residences and businesses, using existing in-building wiring to connect units wirelessly from a rooftop antenna.

While this strategy might reduce capital expenses, “don’t believe the hype about residential fixed service being substituted by a wireless access solution any time soon, at least not in most urban geographies,” Ars Technica warns.

Google Fiber will still be competing with the likes of AT&T and Verizon, both of which have pledged billions to build out their next-generation wireless networks. With “pressure on Fiber to reduce its costs, it’s likely [it] will be beaten to market in a lot of major cities,” The Motley Fool predicts.

In the long term, shaking up the internet service market could prove too much even for a company as big as Google—unless its prepared to go all-in and continue investing heavily. Broadband expert Benoit Felten says any hope of destabilizing the powerful incumbents rests on:

Target[ing] and quickly deploy[ing] in 30 markets with a Webpass-like solution with the promise that if the demand is there, Fiber may be installed down the line. This positions the wireless broadband solution as a quick-to-market acquisition tool. It also forces AT&T to respond everywhere at the same time, something which (I suspect) they are incapable of and unwilling to do.

It remains to be seen whether Google has the stomach for such shock-and-awe tactics.

Copyright © 2016 IDG Communications, Inc.

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