Wednesday, July 25, 2012

Google Fibre update

Some interesting speculations in advance of the much-anticipated launch of Google Fibre in Kansas City tomorrow, 26th July 2012 (see here for more).

The Green (Low Carbon) Data Centre Blog offers this analysis of why Google embarked on the project:
"Google fiber connects users with a 1 gigabit bandwidth connection vs. a more typical 10 megabit to the home.  Remember the days when the corporate LAN was 10 megabit, and it was a privilege to have 100 megabit?  1 gigabit is the common connection in corporate LANs now, and data centers are networked with 10 gigabit...Google is going to be able run load tests on these data centers with 1 gigabit connections to thousands of users...With this data Google will be able to more accurately plan for when 1 gigabit will be pervasive what kind of changes are needed in the data centers, servers, networking storage, software, operations to run 1 gigabit connections."
GigaOM suggests Google's intention is to explore strategic options rather than simply operational issues:
"Google said it wanted to build out the network so it could see what people might do with a full gigabit connection, but I also think this is Google’s answer to the ISP’s continued whining about how much networks cost to operate and how providers like Google or Netflix should pay them for delivering traffic across the ISP’s networks. Soon, Google will have real data on what it costs to build and operate a wireline network — and in typical Google fashion I expect we’ll hear about how it has driven those costs down by building or adapting gear in a way traditional ISPs haven’t. Hopefully at the event we’ll also learn more on what Google plans to charge for access to the network as well as if it plans to share it with other ISPs."
Another interesting commentary from GigaOM here. Bill St. Arnaud's Free Fiber to the Home Blog (also cited on Fiberevolution), in questioning how Google is going to make the venture profitable, suggests Google intends to connect everyone for free with a basic level of Google TV ad-driven service and offer energy management services on top:
"An intriguing hint on Google’s strategy is their plans to deploy fiber above the neutral wire on the poles. Although far less cluttered than being below the neutral wire, this means that specially trained or electrical utility crews  must install the fiber. It means that any moves adds, or changes to the fiber splice boxes etc will require these same expensive, unionized crews.  Generally when deploying a FTTH network, drops to individual homes are installed when a customer subscribes to the service, but with fiber installed above the neutral wire, it probably makes more sense to deploy all drops and splice boxes during the initial build out. This also drives up front costs. The only way for this type of strategy makes sense is if Google plans to fiber up every home from day one...Google will offer a basic free high speed Internet to each and every home, perhaps bundled with Google TV using their new set top box. A variety of premium services will also be offered for additional fees...The other potential area for Google to make money is operating as an ESCO (Energy Services Company)...rather than enticing customers to monitor their energy Google, in partnership with the local utility, could offer to peak manage the customer’s power usage, by briefly turning off air conditioners and hot water tanks. They could also install smart thermostats and other devices to further reduce energy consumption. The money in the energy savings would use to pay for the fiber or premium services, rather than being returned to the customer as piffling amount of energy savings."
It will be interesting to see what tomorrow's announcement brings.

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