Nationwide Google Fiber would cost $11B over five years
arstechnica.com
arstechnica.com
The ideal network is publicly owned and privately operated/maintained, but that will never happen because the state would be impinging on the liberty of corporations to profit. In a reasonable state, the gov't would connect every home and operators would compete on service. Instead, we take the tacit monopoly granted to early operators and extend that into the abysmal dystopia we live in today, one where carriers control all.
You could have ubiquitous 10Gb links to every home, if only some one would let you, and then folks start to say "well why don't we do this for every industry. Why if everyone paid their fair share we could all have cheap healthcare!". And therein lies the problem.
Profit and public interest are diametrically opposed in the case of utilities. Nevermind that most carriers operate over publicly licensed spectrum, or send cables along publicly owned land; a monopoly is the epitome of capitalism and Telecom is printing money.
In short, ubiquitous fast internet access has never been a technical problem or a distribution problem, it is a social problem; just like healthcare and, to a lesser extent, power and water.
::EDIT:: I am not saying that profit or capitalism is wrong, only that in the case of utilities, on which we all rely, it is a bit strange.
But you said earlier:
> Instead, we take the tacit monopoly granted to early operators and extend that into the abysmal dystopia we live in today, one where carriers control all.
So you agree that what we have in the telecom industry isn't capitalism (since it is the government that grants these telecoms their monopolies), yet you also think that capitalism inevitably leads to monopolies, even though this is demonstrably not the case?
But it's also a bit wrong to argue that capitalism is at fault here. It appears it's rather the rampant and ubiquitous corruption, greed, and incompetence of government at every level, coupled with the fact that $$ == speech in the USA.
This isn't going to change into a publicly-run publicly-funded enterprise anytime soon, so our best bet is a company that has yet to be wholly consumed by evil (Google, in this case, though they're on the fast track to it by trading our privacy for money from advertisers). I'd be OK with a country-wide investment to help Google deploy Fiber as quickly as possible, but I'd want some kind of guarantee that at some point the entire infrastructure would revert to public control, just to prevent Comcast 2.0 from forming. It would be rather funny to see a kickstarter hit $11B, too.
You want to stop a monopoly from forming... by creating a government-run monopoly. And you trust the government to be in complete control of the internet. Yet you agree that the government is corrupt, greedy, and incompetent. I don't understand in the least.
No government is involved here. We'd be handing Google the funds to demolish any and all competition with an agreement that they do NOT create a monopoly.
Both local and federal government have colluded to create the trust of service providers that exists today. Public funds paid to build much of the existing infrastructure, then exclusive control over that infrastructure has been granted by local governments. That's fine within a state, but Comcast for example, is operating nationally, so the federal government (in particular the FCC) has permitted them to acquire some absurd 70%+ of all small service providers and obtain these local monopolies all over the country. We can't trust the government to do the right thing in this space, since even though every wireless provider is colluding to keep prices fixed, and every consumer-facing ISP is colluding to keep prices fixed, there has yet to be any investigation into trusts. It's extremely obvious that the $50/mo being required by every single competing company when the same service is $8/mo anywhere else in the world is a fixed price. All of them should be fined some $50B each and/or dismantled.
But we have an opportunity here: Google could completely destroy their business. All of them. Entirely. We (and Google) understand that their services are overpriced in excess of 500%+ of the actual cost and that they don't actually invest more than ~5-10% of their profits in improving the infrastructure. This leaves a LOT of room for a company with nearly unlimited funding to step in and completely dominate. None of these companies will offer you 1gbps, not even for $500/mo. So if Google, cooperating with the citizens of the US at large, were to agree to build this infrastructure, demolish the entire ISP space, and then turn over everything at some point, I'd be willing to pay 100% of my disposable income, and I'm sure I'm not alone. The $11B it would cost (probably closer to $100B, realistically) would be entirely worth killing the likes of Comcast, AT&T, Verizon, Time Warner, Rogers, Sprint, etc.
We can't really win against lobbyists and every congressperson being guaranteed a job paying in excess of $800k/yr when they retire for doing what big interests want. We can win, however, by abusing the very system they put in place, by massively funding a single corporation. The problem with their logic is that they assume they will continue to have the most money to throw around. No company in existence, in the world, can compete with even 3% of our GDP. None. So if we really want to destroy the massive corruption that exists, we just have to commit the resources necessary. No government required, as the corruption has already provided the framework.
Telecom pretends quite a bit.
So they've achieved two goals of universal access already. They gave everybody a computer and everybody a slow but free internet connection.
Now that they achieved that, they are rolling out fiber to the country. So far it's just in some neighborhoods of the capital, but if you can get it's a pretty good deal 120M fiber connection for $83 USD per month. Beyond fixed line internet, there's 3G/4G coverage over every city/town/village with good bandwidth (i got 5m up / down last time i tried it).
How did they do this? The government treats getting good internet access as a human right. There's ANTEL, a state telco monopoly which sees it's mission as getting everybody online. There's a viable threat that if ANTEL didn't do it's job, the market could be opened to competition. Bridging the digital divide is a national priority and so Uruguay has chosen to invest heavily in making sure everybody's included and online. As a result, Uruguay has the highest internet penetration rates in Latin America.
Other parts of the state, like the energy company is well on it's way to eliminating the need of fossil fuels for electricity production, primarily through hydro and wind power.
Utilities are precisely places where the state can, has, and should continue to provide a common level of service everybody can expect. Getting universal internet access, cheap and fast, is something any country can achieve if they decide it's important. If a tiny country in south american you've never heard of with $15k gdp per capita and 3.8 cows per person can do it, the wealthiest country in the world should be able to pull it off.
We as taxpayers subsidized fiber in this country, we should (as they have in England with BT) force incumbents to share those subsidized lines to competition. Let the competition worry about the last 200 feet leading to my house. Because Buddha knows the incumbents aren't too worried about running it.
For better or worse, we actually are trying to do something about universal care. It's just that there is a particular generation of voters and lawmakers that are truly afraid of losing their level of care to cover who they view as younger and less deserving generations/cultures/people.
$11 billion per year for 20 million homes or roughly $550/home/year or $45/home/month
And, for perspective: From 1936 to 1938, the Rural Electrification Administration spent $210 million ($3.37 billion in 2012 dollars) to connect 100,000 rural farms to the electrical grid at a cost $950 each (over $15,000 in 2012 dollars).
Edit: Per the title update from "annually" to "over 5 years" the above, non-historical numbers are off by a factor of 5. The costs would be $110/home/year or $9/home/month over 5 years!
$9/home/month or $110/home/year for 5 years is even more manageable, though!
Edit: I see now where militiaman21 requested that the title be updated to "over 5 years" per new information. When I posted my numbers, the title said annually. I thought maybe I had missed something in the text.
Anyone else understand why this is poor ROI? Obviously network construction is only part of the operational cost of a big network. But if it's a tiny part, then it seems even stranger that it's being presented as an obstacle. Internet-only rates would be ~$6B/yr, but that has substantially less overhead cost of content associated.
Why would a cable company spend $166m/month in order to get little additional revenue? No, they'd rather add Cable Box Remote Control Rental Fees - it doesn't cost them extra, and it increases their revenue.
Only if they're at risk of losing current subscribers through losing their monopoly status will this behavior change.
"we believe Google Fiber has two related objectives: first, Google is seeking to figure out whether or not, or under what conditions, it can make money as a facilities-based provider of broadband and pay TV services; second, it is an opportunity for Google to test new applications, new ad formats and delivery models (e.g., targeted TV ads) and to get further insight into consumer behavior."
This completely misses what I believe to be the primary reason, which is raising the bar for internet access, regardless of who's providing it. Chrome started out similarly, though my impression is that Google does care about dominance for that now.
But the point is: if google fiber in 3 cities means comcast gets better in 1000, that's a win for google.
Unfortunately, what it means in practice is that Comcast will get better in exactly 3 cities.
As an aside, the Australian government spent ~$4,000 per household to connect each house to FTTH.
A neighborhood has to reach a critical mass of reservations before Google will commit to a rollout.
65% of adults already have broadband at home in the US. So will about 1 in 6 switch to 100x better for marginally more money?
Currently Google charges $70/mo for the service. The numbers doesn't look that bad to me, am i missing something?
The statement is a bit ambiguous, perhaps the problem is that it costs $11B just to reach 20M homes, regardless of whether or not they choose to purchase the service, in which case they would be losing a lot of money.
Also, what if, by chance, google allowed you to reduce your monthly bill by say $10 a month by making your default browser google.com?
Owning the distribution can allow them to enter markets that don't seem so crazy when you consider that google could do offer a YouTube user an upgrade to publish their channel to their local market for a fee.
There are probably a dozen things I can't think of that Google can do with a media monopoly so I'm not ready to say that $11b is too much.
Google doesn't have to bring fiber to everyone; they just have to exert enough pressure on the incumbents to get them to step up their game out of fear that Google might move into <market> next and knock them off their pedestal. Google isn't doing this for good will - they're doing it to advance the state of broadband in the US.
That said, the cost estimates are just infrastructure expenditure to reach 20 million homes. If 1/3rd of those subscribed to Fiber @ $70/mo, 1/3rd at $120/mo, and 1/3rd did not subscribe, or subscribed at $0/mo, that's $15.2 billion in revenue annually, ignoring the $300/install offset from $0/mo customers. Those are totally BS, made-up numbers with wild assumptions, but it's a huge market and there's a lot of money to be made in it.
Considering that Google almost hit $11B in profit in 2012 alone, spending $11B over 5 years on a revolutionary infrastructure project that might even start making a direct profit directly from the monthly fees after a while for itself, but most importantly could totally revolutionize what type of services and experiences Google could deliver to ~15% of American households - doesn't seem like such a bad investment after all.
http://www.hindustantimes.com/business-news/CorporateNews/Am...