Google will admit cheerfully that its plan to build fiber to the home (FTTH) networks is all for show. If accused of perpetrating a regulatory ploy, Google would respond, “Well, yes. So?”
 
“The Official Google Blog” (much cooler than an old fashioned Press Release) points out that “We’ve urged the FCC to look at new and creative ways” to expand broadband access. Now, Google says “we’re announcing an experiment of our own” by offering 1 Gbps connections to at least 50,000 people, and perhaps up to 500,000, in a small number of locations.
 
Google concedes that current network providers are making “real progress” and claims modestly that its intent is only to make a “meaningful contribution,” but its FTTH experiment – if it works out as Google hopes – could deliver game-changing messages.
 
Google seeks to show that if ultra high-speed broadband networks are built, and operated on an “open access” basis, developers will come, and they will produce new apps “we can’t yet imagine.”  
 
Google’s FTTH experiment also could show that online video has become a credible competitive option to traditional cable TV, and that if given the option, consumers will choose to buy their video programming à la carte instead of embedded in cable tiers.
 
Pre-requisites for a Compelling Story
 
However, Google’s FTTH experiment could well fizzle and prove nothing of value from Google’s point of view, not only because Google’s assumptions may be incorrect, but also because Google has limited control over other key actors – the host communities, service partners, and consumers. 
 
Host Communities: Google has posted an RFI that invites municipal governments to compete for the privilege of hosting Google’s FTTH networks, and it will certainly receive proposals from under-served and unserved communities in rural and outlying areas. Google appears to welcome this, when it refers to “sitting in a rural health clinic, streaming three-dimensional medical imaging,” and when it requests evidence that the community needs and desires a Google broadband network. However, offering ultra-high-speed Internet connections “at a competitive price” in under-served communities will prove only that people who are desperate for broadband will buy it when offered, hardly a compelling story.
 
To demonstrate the superiority of its broadband model, Google needs to show that it is competitive with existing advanced services. Thus it would be preferable for Google’s purposes to build the FTTH networks in densely populated communities where people can already subscribe to cable (and sometimes telco) multi-play bundles. Also, parenthetically, while financial performance is not at issue in the FTTH experiment, cost-per-home-passed in such communities will be high, but not as insanely exorbitant as in the less densely populated areas.
 
The catch is that governments in well-served communities may be relatively unenthusiastic about competing for a Google FTTH network. They’d have less evidence to report of local needs and desires for another broadband provider. And in order to win a Google FTTH network, they might need to agree to favorable terms that would set precedents for their currently franchised operators, even though Google takes care to point out that it “respects the legitimate responsibility of local governments to preserve and protect community assets, minimize disruption, ensure the safety of the public, address aesthetic concerns and property values, and obtain reasonable compensation for the use of public assets.” 
 
Service Partners: The partners that Google is counting on to make effective use of the FTTH “open access” networks, such as app developers, video content packagers, and providers of retail broadband services, will be concerned about scale and sustainability. They might find a potential market size underwhelming that will not exceed 500,000 people, and perhaps be as few as 50,000, and investors may balk at putting money down on a business venture that is premised on a Google “experiment.”
 
Consumers: Google’s narrative will have a happy ending if the FTTH networks are built and if consumers who have a choice nevertheless select Google’s broadband connections in order to meet their needs for video, voice, and data. But it’s hard to predict what consumers will do; and there’s little doubt that the incumbent operators will try to lock in their subscribers with loyalty offers, promotions, and whatever else is in their kit bags.
 
Sharing Google’s Vision
 
Let’s assume, despite the odds, that Google’s FTTH experiment does produce a convincing story. This doesn’t mean that Google will start building FTTH networks for real. This experiment is not about market share; it’s about mind share. There’s no way that even Google, with all its money and audacity, can overbuild the whole country with FTTH networks. Instead, Google wants to re-shape the use of the existing broadband networks.  
 
Influencing regulators will help. But Google’s FTTH project may also have a more ambitious goal: to affect the business calculations of incumbent cable operators and telcos. Google’s “experiment” will succeed if it induces cable operators and telcos to evolve their own broadband networks and their business models towards greater alignment with Google’s vision of the future online world.

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