March 04, 2010
|Greensboro Wants To Be Hit In Google Search|
The prospect of attracting Google's first-in-the-nation fiber-to-the-premises broadband trial to Greensboro has companies, universities and just plain internet speed freaks salivating – but Greensboro is a long-shot candidate and the sketchy Google proposal has so far raised more questions than it has answered.
The fiber network, which Google plans to build as a technology and market test, would provide 1 gigabit per second service, vastly increasing the bandwidth available to homes and businesses. Most DSL and cable broadband now falls in the 3-to-7 megabit range.
Google isn't saying what criteria it will use to pick its test market. But it's a sure bet the company will look for a united, cooperative city government (we're in trouble already) and a city willing to make major ordinance concessions to ease access to city-owned rights-of-way (a majority of the cost of laying fiber is in obtaining rights-of-way and digging, rather than in the network itself). The company will want a stable, committed partner for its broadband marriage. Greensboro has a reputation for political flakiness and infighting – but maybe no one has told Google that. Greensboro would have to make a visible, sustained effort. For heaven's sake, Topeka, Kansas, has already temporarily renamed itself "Google, Kansas" in an effort to woo the internet giant.
Greensboro, like most mid-sized cities, now has a de facto broadband duopoly in which the broadband market is split between two providers – in Greensboro's case, Time Warner Cable and AT&T, with players like Clearwire Corp. left nibbling at the edges of the market.
That's the situation that has developed in most mid-sized markets since the failure of the federal Telecommunications Act of 1996. The act was passed with great fanfare as the cure for telecommunications monopolies but smothered by a series of Federal Communications Commission (FCC) decisions that left the former Bell companies, like AT&T, firmly in control of telephone networks in their regions, with only the newly broadband-capable cable companies as competitors. In a majority of cities Greensboro's size, most customers have only two broadband providers to choose from – and those providers have little effective price competition to lower prices, and little incentive to upgrade their networks beyond the bare minimum needed to convince customers that they're getting broadband.
Google's entry into a moribund broadband market like Greensboro's would shake up the market, forcing whatever providers use Google's network to provide competitive prices and services in a way they haven't had to before. Time Warner and AT&T would have to upgrade their networks and drop their prices to survive here – unless they decided to move to the Google platform, which would be a bitter pill for a longtime network operator.
Google has pledged that the test network, wherever it is built, will be open access, a telecom term of art that usually means open to all service providers at the same cost-based prices and terms for resale – the way you can now buy, say, EarthLink service, which is actually rebranded Time Warner broadband.
Google has also been a supporter of network neutrality – the idea that the internet should be an open platform that connects all devices and services without discriminating among them. The internet was built as an entirely neutral and mostly open network, although the dominant broadband providers who run the underlying telephone and cable networks that provide its last mile – the one nearest your home – have fought for years to regain the kind of control over services and prices that they had over cable and telephone service. In a world run to their satisfaction by the cable and telephone incumbents, the internet would be like cable television – a pipe providing company approved (or at least company prioritized) services, at company inflated prices, to your home for passive consumption.
Greensboro residents got a taste of that limited, pricey future in April 2009, when Time Warner announced that it would make the city a test market for metered internet access – forcing customers to move to pay-per-bit plans similar to mobile data services and in effect making streaming video and other bandwidth-intensive applications economically unviable. That would have left Time Warner free to sell more of its traditional video services without having to compete with the free and low-cost video services the internet provides and its users love. Time Warner backed away from the proposal after customers howled.
Open-access supporters like Google have fought in Washington, DC, for years to try to get the FCC to maintain open access to the telecommunications networks on which the internet rides – but have lost ground inch by inch. A Google network built from the ground up would allow the search giant to bypass the cable and telephone companies that control the last mile, making Greensboro's network like the backbone of the data network – an environment in which all traffic is considered good because it generates revenue, rather than one in which the provider tries to discourage traffic with metering or usage caps.
The best-case result? A Greensboro that becomes a test bed for bandwidth-intensive apps, many of which probably haven't even been invented or perfected yet, because of high costs at the last-mile chokepoint.
Greensboro City Councilmember Robbie Perkins, at a support-building event the city held on Wednesday, Feb. 24, told those present that one company has already proposed a new service: Greensboro Radiology, which is creating a repository of electronically stored medical records that could be easily available to doctors throughout the region – if Greensboro had better broadband. "Because of the file size of these documents, the present technology is frustrated," he said.
Speakers at the event hyped Greensboro as a good fit for the Google trial. Resident Jonathan Davis said Greensboro is close to fiber trunks running to Charlotte and Chapel Hill and would connect easily to the Google data center in Lenoir, North Carolina, and Apple's massive new data center in Maiden, North Carolina. That is probably wishful thinking – another city competing for the Google trial is Palo Alto, California, the heart of Silicon Valley and one of the best-connected cities in the country when it comes to fiber backbones.
Some of the speculation over Greensboro's application for the Google fiber trial has centered on potential city incentives – with the Piedmont Publius blog at the John Locke Foundation fretting that Greensboro will go the way of Wilson, North Carolina, which spent $28 million on a municipal fiber network that it can't pay off with the network's revenues.
This makes no sense in the context of Google, although the reflexive fear is understandable in an area with a less-than-stellar record of getting a bang for its buck when it comes to incentives. Google has a $170 billion market cap and $24 billion in cash on hand, and is looking to spend a large chunk of money on a fiber trial that is equal parts market-creation effort, regulatory lever and public relations showcase. Whatever its criteria for picking a city, it has little incentive to nickel and dime that city for a few million in cash contributions and tax breaks, taking the luster off the PR victory.
Analyst estimates vary on what it will cost Google to build the network, but most seem to fall in the $500 million to $750 million range – far more than it would cost experienced network operators to wire a city using less cutting-edge technology. At that price point, a few million from a city is a paperwork hurdle rather than a help. Google may take incentives, but it's unlikely to base its siting decision on them.
One speaker at the meeting, surveying Greensboro's relentless averageness when it comes to businesses, demographics and population density, said that trying to hype the city's supposed advantages wasn't helpful, and that the city should instead come up with novel uses for all that bandwidth the trial would provide – a good point, since the possibility of new, advanced services may be the strongest attraction for Google.
There are many unanswered questions about the proposed Google trial. Among them are the cost at which it will offer service, the terms on which it will allow other service providers to access its network, and the technology it will use.
Speculation has centered on whether Google has ulterior motives – Piedmont Publius fretted that the company is trying to build out bandwidth to create demand for Google services – and whether Google can make the trial a business success.
The answers to those two questions are, "Yes, obviously" and "Probably not, but who cares?" Of course, Google has its own business and regulatory motives for building a trial network – if it didn't, it wouldn't. Despite its famous motto, "Don't be evil," Google isn't in the business of altruism. And there's no indication that Google will conquer the entrenched network world with its trial – or even make a profit on the venture. It doesn't have to, and there is no market in which a new entrant is more likely to take a bath than in telecom infrastructure.
As others have noted, Google in the 2000s is similar to Microsoft in the 1990s – a company that is hugely successful in its core business but not so successful when it ventures out of it. Both companies had money to burn and could afford to take chances and fail. The Google trial will be a win for whoever gets it, regardless of the depth of the bath the company takes. It's a long shot for Greensboro – but hey, someone has to win.