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Re: Google Plans to Build Ultra High-Speed Broadband Networks

From: Dave Farber <dave () farber net>
Date: Sat, 13 Feb 2010 09:56:56 -0500




Begin forwarded message:


From: ken <ken () new-isp net>
Date: February 13, 2010 9:52:48 AM EST
To: dave () farber net
Subject: Re: [IP] Re: Google Plans to Build Ultra High-Speed Broadband Networks 




Dave,

Perhaps these comments and this link will help to shed some light on
this discussion.

George, (et al)
Donny Smith (Jaguar Communications) has the lowest connected cost of any FTTH network construction company that I am aware of and Jaguar trenches 
all of their installations.

Here is a link to an analysis of Jaguar's network even thought I am
reliably told that their numbers now are closer to $5K/mile for backhaul 
plus $600 per home connected.
http://nextgencommunications.net/blog/2005/05/the-better-model/

Now, with respect to whether Google will cherry pick locations, I
believe it is only fair to wait and see before passing judgment.

Respectfully,

Ken DiPietro
Ellersile MD


On 02/12/2010 10:54 AM, Dave Farber wrote:





Begin forwarded message:


*From:* George Ou <George.Ou () digitalsociety org
<mailto:George.Ou () digitalsociety org>>
*Date:* February 12, 2010 7:31:46 AM EST
*To:* "dave () farber net <mailto:dave () farber net>" <dave () farber net
<mailto:dave () farber net>>, "ChrisSavage () dwt com
<mailto:ChrisSavage () dwt com>" <ChrisSavage () dwt com
<mailto:ChrisSavage () dwt com>>
*Subject:* *RE: [IP] Re:    Google Plans to Build Ultra High-Speed
Broadband Networks*
“For example, I recall that Loma Linda (a municipal fiber build) used 
some UK-based inexpensive fiber-laying system using micro-trenches,
and fiber in some special sheathing to make it especially easy to
run. A completely new network might be able to use such a system in a way that an established network provider might not find attracti ve.”
I guess you think that Verizon must be really stupid for doing things 
the old fashion bell-head way and spending $800 per home passed plus
another $800 to hook up an actual subscriber. Those young wizards at 
Google will just figure out how to cut costs in half.
Now let us return to reality. Verizon’s costs are the lowest in the 
industry because most of their cabling is aerial.  Underground plant
costs about 7 times more money and this is one of the major reasons
Qwest is avoiding fiber because 3 quarters of their homes use
underground plant while Verizon has the opposite ratios.
Google is going to cherry pick fewer than 1% of homes that will be the 
cheapest/shortest aerial runs and communities with the least onerous
regulations. Then they’re going to turn around and claim that t his is 
somehow relevant to the remaining 99% of the nation.







George Ou





*From:* David Farber [mailto:dave () farber net]
*Sent:* Thursday, February 11, 2010 5:43 AM
*To:* ip
*Subject:* [IP] Re: Google Plans to Build Ultra High-Speed Broadband
Networks







Begin forwarded message:



*From: *"Savage, Christopher" <
<mailto:ChrisSavage () dwt com>ChrisSavage () dwt com
<mailto:ChrisSavage () dwt com>>

*Date: *February 11, 2010 8:27:39 AM EST
*To: *< <mailto:dave () farber net>dave () farber net <mailto:dave () farber net >> 

*Subject: RE: [IP] Re: Google Plans to Build Ultra High-Speed
Broadband Networks*



Dave,
I’d add the following to Chuck’s points. Suppose Google goes bi g and 
ends up serving 500,000 people.  At 2.5 people/household that’s
200,000 customers.  I don’t have the numbers handy but I suspect a
network with 200,000 customers would put them in the top 20 network
operators in the country.  (Numbers fall off pretty steeply after
Verizon-AT&T-Qwest-Century-Comcast-TW-Cox-Cablevision-Charter- BrightHouse…) Their experiment may be the worst flop of all time, but whatever they 
learn will reasonably apply to a very large segment of the populace.



For example, I recall that Loma Linda (a municipal fiber build) used
some UK-based inexpensive fiber-laying system using micro-trenches,
and fiber in some special sheathing to make it especially easy to
run. A completely new network might be able to use such a system in a 
way that an established network provider might not find
attractive.  If that process was cheap enough, and scaled well, that
would be very interesting information for the industry as a whole (not to say regulators) to see. (Cf. /The Innovator’s Dilemma/). It would imply that Chuck’s back-of-the-envelope cost estimates are high by a 
nontrivial factor.



As another example, I have heard some strong network neutrality
proponents argue that over a reasonable planning period, the cost of
adding bandwidth to deal with the demands of the top 5% or 1% or 0.1% of users who send/receive massive amounts of data is actually cheaper 
than the cost of deploying the systems needed to monitor, limit,
and/or bill for their usage.  This has always struck me as an
interesting, if a bit implausible and counterintuitive, assertion. A 
1 Gbps network might well provide a test of it.  (I am reminded here
of the survival approach of the 17-year cicadas that we get here in
the mid-Atlantic. It’s called “predator satiation.” With billions of 
defenseless cicadas available, predators eat all of them they want,
and then get sick of them and mainly leave them alone – with bil lions still left. Perhaps with currently available apps there really is an upper limit to how much bandwidth any one person will use, i.e., maybe 
it is possible to simply satiate the bandwidth “hogs”.)
I have to say – win, lose, or draw, Google’s proposal here is on e of 
the most */interesting /*things to happen in the business for quite
some time…



Chris S.
--- --- ------------------------------------------------------------------ 

*From:* David Farber [mailto:dave () farber net]
*Sent:* Thursday, February 11, 2010 7:56 AM
*To:* ip
*Subject:* [IP] Re: Google Plans to Build Ultra High-Speed Broadband
Networks







Begin forwarded message:
*From: *"Charles Jackson" < <mailto:clj () jacksons net>clj () jacksons net 
<mailto:clj () jacksons net>>

*Date: *February 10, 2010 9:47:32 PM EST

*To: *"'Faulhaber, Gerald'" <
<mailto:faulhabe () wharton upenn edu>faulhabe () wharton upenn edu
<mailto:faulhabe () wharton upenn edu>>

*Cc: *"'David Farber'" < <mailto:dave () farber net>dave () farber net
<mailto:dave () farber net>>

*Subject: RE: [IP] Google Plans to Build Ultra High-Speed Broadband
Networks*




Well, Google never claimed to be providing a real broadband
distribution service or significant infrastructure.  Rather, they
proposed an experiment. On Google’s blog, they claim that they are looking to offer service to between 50,000 and 500,000 people. If we 
assume 2.5 people per household, this works out to 20 to 200 K
households. If we assume $1,000/passing, $1,000 more per active drop, 
and 10% penetration, then passing 50 K people (20K subs) would cost
them $22 million.  I think they can afford that.
Heck, they might learn enough about future or emerging consumer needs 
that this experiment will be well worth the money.



See
<http://googleblog.blogspot.com/>http://googleblog.blogspot.com/ and
<http://www.google.com/appserve/fiberrfi>http://www.google.com/appserve/fiberrfi . 



There’s also the political side.  If they pick a medium sized
community (100 K pop), with above ground utilities (easy to build),
outside the snow and hurricane zones (no interruption of
construction), and a poor cable TV system and no FIOS, their service
could easily come out looking golden.
Making the experimental network “open” probably costs them littl e and 
gives them another political plus.





Chuck





*From:* Faulhaber, Gerald [mailto:faulhabe () wharton upenn edu]
*Sent:* Wednesday, February 10, 2010 9:15 PM
*To:* Charles Jackson
*Cc:* 'David Farber'
*Subject:* RE: [IP] Google Plans to Build Ultra High-Speed Broadband
Networks



Well, if we have a charitable organization willing to lose money on
broadband distribution, fantastic!  We’ll let search advertising
subsidize infrastructure. I’m all for that; but then I don’t ow n any 
Google stock.



My point re: CLECs is that a firm actually needs to have real
experience in local distribution networks to make them work (i.e., run 
with reasonable reliability, not break down due to weather and poor
outside plant, not have the fiber chewed up be squirrels, not have
repeaters used for target practice, all the boring stuff that network guys know and Silicon Valley guys don’t), not just money to thro w at the problem. When they’ve successfully trenched 5,000 miles of fiber 
under city and suburban streets and it actually operates for a year
without failure, then they might have some network cred.



Professor Emeritus Gerald Faulhaber
<http://assets.wharton.upenn.edu/~faulhabe>

Business and Public Policy Dept.

Wharton School, University of Pennsylvania

Philadelphia, PA 19104

/Professor Emeritus of Law/

/University of Pennsylvania/

*From:* Charles Jackson [mailto:clj () jacksons net]
*Sent:* Wednesday, February 10, 2010 8:56 PM
*To:* Faulhaber, Gerald
*Cc:* 'David Farber'
*Subject:* RE: [IP] Google Plans to Build Ultra High-Speed Broadband
Networks



I’m game to sharing this exchange with the IP audience.
My response to Gerry’s response is that the proper model for Goo gle’s 
experiment is not a CLEC (funded by investors trying to get their
money back) but more like “Green Acres” in which Oliver Wendell
Douglas can get by even if he doesn’t make any money farming.  If
Google is willing to lose a little money (in Google terms) and puts a good manager on the project, they can provide first-rate service. If they choose a market that is currently underserved, they could end up 
looking pretty good.



If they offered service to 100,000 people, that would be about 40K
households. If they got 10% penetration, that’s only 4K custom ers. 
It doesn’t take a lot of resources to give good service to 4K
customers—especially if you are willing to lose $2 for every $1 billed. 



Chuck







======================

Charles L. Jackson



301 656 8716    desk phone

888 469 0805    fax

301 775 1023    mobile



PO Box 221

Port Tobacco, MD 20677
--- --- ------------------------------------------------------------------ 

*From:* Faulhaber, Gerald [mailto:faulhabe () wharton upenn edu]
*Sent:* Wednesday, February 10, 2010 8:05 PM
*To:* Charles Jackson
*Cc:* David Farber
*Subject:* RE: [IP] Google Plans to Build Ultra High-Speed Broadband
Networks
Chuck [Dave, I’m happy to have this exchange on IP, if Chuck agr ees]-- 



I mis-spoke.  I meant experience in running a local distribution
network, and was a bit sloppy in not being specific.  But running a
long-haul network is worlds apart from running a local distribution
network.  Evidence?  Many of the CLECs /circa/ 2000 were run by
redundant AT&T operations guys, who thought they understood networks. 
Turns out they were clueless when it came to local distribution, and
most went belly-up (helped along by recalcitrant ILECs of course).
But these guys went into a business they didn’t understand while
thinking they did understand it.  Running Google’s CDN is no
experience for local distribution.



Professor Emeritus Gerald Faulhaber
<http://assets.wharton.upenn.edu/~faulhabe>

Business and Public Policy Dept.

Wharton School, University of Pennsylvania

Philadelphia, PA 19104

/Professor Emeritus of Law/

/University of Pennsylvania/

*From:* Charles Jackson [mailto:clj () jacksons net]
*Sent:* Wednesday, February 10, 2010 7:47 PM
*To:* <mailto:dave () farber net>dave () farber net <mailto:dave () farber net > 
*Cc:* Faulhaber, Gerald
*Subject:* RE: [IP] Google Plans to Build Ultra High-Speed Broadband
Networks



Gerry wrote:

Google has never run a carrier-grade local networking business
(besides its trivial Mountainside, CA WiFi network) and has zero
experience in networking.  Networking is a very different business
from anything Google has done before . . .
Google’s Internet backbone appears to be the second or third big gest 
backbone.  Google runs an ENORMOUS network.   A recent presentation
stated that Google accounts for about 5% of Internet traffic—be hind 
only Level 3 and Global Crossing.
See http://www.nanog.org/meetings/nanog47/presentations/Monday/Labovitz_ObserveReport_N47_Mon.pdf .
Google may not be an ILEC or cable company, but the organization must 
possess a significant (enormous?) amount of networking knowledge.
They haven’t been doing access networks—but there are probably very 
few entities in the world that spend more on routers.



If Google chooses to offer service in a community that has a poor
cable company and no FiOS, they should find it easy to look golden
(assuming that they are willing to lose a few hundred dollars per
household passed.)





Chuck

(Charles L. Jackson)
--- --- ------------------------------------------------------------------ 

*From:* Dave Farber [mailto:dave () farber net]
*Sent:* Wednesday, February 10, 2010 6:50 PM
*To:* ip
*Subject:* [IP] Google Plans to Build Ultra High-Speed Broadband Networks 



I agree with Gerry. Djf


Begin forwarded message:

   *From:* Gerry Faulhaber <
   <mailto:gerry-faulhaber () mchsi com>gerry-faulhaber () mchsi com
   <mailto:gerry-faulhaber () mchsi com>>
   *Date:* February 10, 2010 5:59:59 PM EST
   *To:*  <mailto:dave () farber net>dave () farber net
   <mailto:dave () farber net>
*Subject:* *Google Plans to Build Ultra High-Speed Broadband Networks* 

   Dave [for IP]



   I am a huge enthusiast for more broadband competition and welcome
   Google into the business.  I have always wondered why Google
   (whose market cap = $179B compared to total US cable industry =
   $95B) whined incessantly about the domestic BB providers when it
   could well have entered the market itself.  It certainly has the
   financial strength to do so, and has for quite some time.  Its
   entry (which this announcement perhaps heralds) is long overdue,
   in my book.  But this is merely a blog announcement, and talk is
   cheap.  Let's be cautious about how much we read into this.



   But let's be serious; Google has never run a carrier-grade local
   networking business (besides its trivial Mountainside, CA WiFi
   network) and has zero experience in networking.  Networking is a
   very different business from anything Google has done before, and
   my guess is that unless they are in for the long haul, they will
   get their head handed to them...by customers who are unwilling to
   tolerate poorly performing networks.  They have also shown
   themselves cack-handed at dealing with the politics of local
   distribution.  Remember the Google/Earthlink San Francisco Free
   WiFi network proposal?



   Google, I certainly encourage you to get into this business.  But
   this ain't no search engine biz; running carrier-grade networks
   for commercial and residential customers is tough and demanding
and presents challenges you have never encountered before. I hope 
   you are up to it.



   Professor Emeritus Gerald Faulhaber

   Wharton School and Law School,  University of Pennsylvania

       ----- Original Message -----

       *From:* Dave Farber <mailto:dave () farber net>

       *To:* ip <mailto:ip () v2 listbox com>

       *Sent:* Wednesday, February 10, 2010 1:25 PM

       *Subject:* [IP] WSJ TECHNOLOGY ALERT: Google Plans to Build
       Ultra High-Speed Broadband Networks






       Begin forwarded message:

           *From:* "charles.brownstein" <
<mailto:charles.brownstein@ verizon.net>charles.brownstein () verizon net 
           <mailto:charles.brownstein () verizon net>>
           *Date:* February 10, 2010 1:18:05 PM EST
           *To:* David Farber <
           <mailto:dave () farber net>dave () farber net
           <mailto:dave () farber net>>
           *Subject:* *Fwd: WSJ TECHNOLOGY ALERT: Google Plans to
           Build Ultra High-Speed Broadband Networks*





                   __________________________________

                   Technology Alert

                   from The Wall Street Journal





                   Google plans to build and test broadband networks
                   that could deliver speeds more than 100 times
                   faster than what most Americans use. The plan,
announced on a company blog, could expand Google's 
                   position on the Internet by answering consumer
                   demands for ever-faster connections.



                   <http://online.wsj.com/?mod=djemalertTECH>http://online.wsj.com/?mod=djemalertTECH





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