Is Google Fiber: ‘Dead Business Model Walking?’

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Broadband consultant Scott Cleland, president of Precursor, questions the viability of Google Fiber’s business model. In fact, he blogged the it looks like a “dead business model walking.”

Google acquired wireless ISP Webpass in June, Inside Towers reported. Then in July, Alphabet-Google executives ordered the Google Fiber team be cut in half to 500 personnel and reduced the cost of bringing fiber to homes to one-10th their current costs, according to Cleland.

At the same time, the company told investors it continues to see Google Fiber as a huge market opportunity and continues to work with cities. In August, a federal appeals court ruled the FCC could not preempt state governments from limiting municipal broadband extension and the Commission decided not to appeal.

At that point the future dimmed for Google Fiber and muni-fiber broadband deployments, mused Cleland. “What all this means is that two pillar, Google Fiber foundational assumptions had to radically change this summer: technology choice from Gigabit-fiber to wireless/FI/WiGig; and regulatory strategy from fiber Title II regulated muni-broadband business model to an unregulated/unlicensed-spectrum and muni-WiFi business model.” 

Launched in 2010, Google reportedly hoped to get 5 million broadband customers signed up in five years, or roughly four percent national market share. After four years, it had 200,000 internet subscribers — about 2 percent national market share, “95 percent short of expectations,” wrote Cleland.

He does credit the company with prodding the broadband industry to make gigabit broadband available. That competition has helped ensure 90 percent of Americans have access to 25 Mbps broadband, according to the FCC’s 2016 Broadband Progress Report. “So in a different and unintended way Google proved very successful overall, because Google Fiber lived up to its name as a powerful regulatory laxative to the constipated state of municipal regulation of communications infrastructure,” wrote Cleland.

Look for the Google Fiber brand name to go away and for something else, like something ending in “Fi” to take its place. The company could also try to build a new generation of internet access service with free, unlicensed spectrum. That way it could replace the high cost of laying fiber “with free unlicensed spectrum end-to-end connected to free internet backbone peering with no paid prioritization, and with near full software-defined network automation that requires minimal employees.”

October 18, 2016

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