<story><title>Google Fiber Is High-Speed Internet’s Most Successful Failure</title><url>https://hbr.org/2018/09/why-google-fiber-is-high-speed-internets-most-successful-failure</url></story><parent_chain><item><author>BonesJustice</author><text>I see this a bit differently, and I frequently use the history of Google Fiber as evidence for strong net neutrality regulations.&lt;p&gt;In the areas where it was deployed, Google Fiber was wildly successful.  And yet, Google threw in the towel.  Why?&lt;p&gt;It _isn’t_ because Google Fiber is was unprofitable. To the contrary, it was profitable _despite_ driving broadband prices way down in its service areas.&lt;p&gt;It’s because the incumbent ISPs simply have too much power.  That power comes in many forms:&lt;p&gt;&lt;pre&gt;&lt;code&gt;  1. Excessive industry lobbying power;  
  2. Anti-competitive exclusivity agreements;  
  3. The ability to stall rollouts indefinitely in the absence of “one touch make ready” policies;  
  4. Required cooperation with and permission from governments who feel less pressured to move quickly once their residents have at least one incumbent provider;
&lt;/code&gt;&lt;/pre&gt;
etc.&lt;p&gt;If the incumbents are &lt;i&gt;so well protected&lt;/i&gt; that one of the most powerful corporations in America found the barriers to entry too burdensome, then how can &lt;i&gt;anyone&lt;/i&gt; argue that there is any semblance of a “free market”?  What hope is there for startup ISPs?&lt;p&gt;The incumbents have received hundreds of billions of taxpayer dollars, so they already had a government-assisted head start.  And, despite prices being so inflated that they &lt;i&gt;halved overnight&lt;/i&gt; wherever Google Fiber rolled out, they are &lt;i&gt;still&lt;/i&gt; able to effectively stave off meaningful competition.&lt;p&gt;Would that be possible in a healthy, competitive marketplace?  No.  So we need to stop treating it like one, when it clearly isn’t.</text></item></parent_chain><comment><author>rayiner</author><text>Several of your factual assumptions are just wrong. For example, there are no &amp;quot;exclusivity agreements&amp;quot;--those have been illegal under federal law since 1994. Also, ISPs never received &amp;quot;hundreds of billions of taxpayer dollars.&amp;quot; That number is a total fabrication: &lt;a href=&quot;https:&amp;#x2F;&amp;#x2F;news.ycombinator.com&amp;#x2F;item?id=7709556&quot; rel=&quot;nofollow&quot;&gt;https:&amp;#x2F;&amp;#x2F;news.ycombinator.com&amp;#x2F;item?id=7709556&lt;/a&gt;.&lt;p&gt;But leaving the facts aside, this is something you can logic through. Instead of speculating about what problems Google might have faced, look to its actual conduct to see what problems it tried to avoid. If &amp;quot;industry lobbying power&amp;quot; was the problem, you&amp;#x27;d expect Google would try to deploy fiber somewhere it had the leg-up lobbying-wise, like Seattle or San Francisco or Mountain View. It never did that. Under your theory, you have to assume that Comcast (based in Philadelphia) has more lobbying muscle in Google&amp;#x27;s own back yard than Google.&lt;p&gt;What did Google do instead? It went to medium-sized cities in Red states with overhead utility lines. Atlanta, Austin, Provo, Kansas City, etc. Why? Because those cities waived regulatory requirements they applied to incumbents, including the crucial one of build-out requirements (the requirement to build out to the whole city). Google went places like Kansas City, which fast tracked permitting, gave free leases of public land for fiber huts, and waived the obligation to cover low income neighborhoods. Indeed, the willingness to waive build out requirements (which are routine in the industry), is one thing these disparate Fiber cities have in common.&lt;p&gt;All of this tells you that the basic problem with Fiber was profitability (not just making a profit, but enough profit compared to what else Google could be doing with that money). Build-out requirements kill profitability, because you’re forced to spend a lot of money building to neighborhoods where you can expect few customers. (The major cost of a fiber build is wiring the neighborhood, not hooking up each house.) That’s why a cornerstone of Fiber was the idea of “fiberhoods”—neighborhoods with demonstrated demand for fiber. (Of course, remember, the initial fiberhood selection exluded most low income neighborhoods in KC, as you’d expect. Google was forced to back peddle and add a bunch of low income neighborhoods in. But that misstep tells you a lot about the money math that was driving Fiber.)</text></comment>
<story><title>Google Fiber Is High-Speed Internet’s Most Successful Failure</title><url>https://hbr.org/2018/09/why-google-fiber-is-high-speed-internets-most-successful-failure</url></story><parent_chain><item><author>BonesJustice</author><text>I see this a bit differently, and I frequently use the history of Google Fiber as evidence for strong net neutrality regulations.&lt;p&gt;In the areas where it was deployed, Google Fiber was wildly successful.  And yet, Google threw in the towel.  Why?&lt;p&gt;It _isn’t_ because Google Fiber is was unprofitable. To the contrary, it was profitable _despite_ driving broadband prices way down in its service areas.&lt;p&gt;It’s because the incumbent ISPs simply have too much power.  That power comes in many forms:&lt;p&gt;&lt;pre&gt;&lt;code&gt;  1. Excessive industry lobbying power;  
  2. Anti-competitive exclusivity agreements;  
  3. The ability to stall rollouts indefinitely in the absence of “one touch make ready” policies;  
  4. Required cooperation with and permission from governments who feel less pressured to move quickly once their residents have at least one incumbent provider;
&lt;/code&gt;&lt;/pre&gt;
etc.&lt;p&gt;If the incumbents are &lt;i&gt;so well protected&lt;/i&gt; that one of the most powerful corporations in America found the barriers to entry too burdensome, then how can &lt;i&gt;anyone&lt;/i&gt; argue that there is any semblance of a “free market”?  What hope is there for startup ISPs?&lt;p&gt;The incumbents have received hundreds of billions of taxpayer dollars, so they already had a government-assisted head start.  And, despite prices being so inflated that they &lt;i&gt;halved overnight&lt;/i&gt; wherever Google Fiber rolled out, they are &lt;i&gt;still&lt;/i&gt; able to effectively stave off meaningful competition.&lt;p&gt;Would that be possible in a healthy, competitive marketplace?  No.  So we need to stop treating it like one, when it clearly isn’t.</text></item></parent_chain><comment><author>georgemcbay</author><text>Not only are the incumbents well protected, but they are increasingly few.&lt;p&gt;2 years ago I had 300 Mbps cable service at home via Time Warner Cable, then they were bought by Spectrum.  Now I have 150 Mbps service.&lt;p&gt;I still live in the same place and I&amp;#x27;m still using the same cable modem (one I own, so as to avoid the ridiculous rental fees) I used back then, but 300 Mbps was simply killed as an option.  I can&amp;#x27;t even pay more for it.&lt;p&gt;Google Fiber may have been a useful gambit to increase the pace of rollout of other telecom&amp;#x27;s high speed offerings, but I would bet good money that it will be a very short-term play with erosion of net neutrality and further consolidation of the telecom market quickly wiping out the benefits.</text></comment>