Google Fiber's About-Face Provides Useful Lessons For A Broken Broadband Industry

from the don't-build-your-house-on-a-swamp dept

Last fall, Alphabet/Google announced that the company would be notably scaling back its Google Fiber ambitions. The company axed its CEO, laid off a small number of employees, and froze a number of anticipated fiber builds (in Portland and a few other locations). Numerous reports indicated that there were growing concerns among many executives about the high costs and slow pace of deploying fiber, so the company was considering an overall pivot to next-generation gigabit wireless while it continued building out most already-announced markets.

While it's hard to call this pivot a failure until we see a real wireless product, ISPs like AT&T were of course quick to suggest Google Fiber was little more than folly (ignoring that AT&T's anti-competitive behavior played a starring role in Google Fiber's struggles in many cities). This has contributed to an overall air of "we told you so" smugness emanating from numerous quadrants of the telecom status quo.

That take, however, is short-sighted. One, the launch of Google Fiber put an unrelenting spotlight on the lack of broadband competition in countless markets, driving many large ISPs (like AT&T) to deploy gigabit broadband service that had previously been unheard of. Google Fiber also managed to shine a bright spotlight on the way many large ISPs use our broken legislative and regulatory systems to keep things broken, whether that's by using utility pole beaurocracy to slow competitors' installs, or writing awful state protectionist law hamstringing what your local town and city can do about it.

Over at Backchannel, long-standing duopoly critic and Harvard Law Professor Susan Crawford notes that there are a lot of useful lessons from Google Fiber, most notably that the system Google Fiber is operating in is effectively rotten to the core:

"The fundamental lesson of Google Fiber is that, in the end, its business model was just like that of another cable actor. It was playing within the existing sandbox, using the right technology but the wrong business model. That sandbox has been left to the vagaries of the marketplace, in which existing monopolies have built moats around their businesses in the form of rights to programming, rights of way, bundled products, relationships with credulous legislators, and a million other barriers to entry that make competing — even for Google — just too expensive for shareholders looking for immediate, media company-like returns, quarter after quarter."

The solution, Crawford insists, is a shift toward local, municipal, open access networks via which ISPs come in and compete:

"The only business model for fiber that will work to produce the competition, low prices, and world-class data transport we need — certainly in urban areas — is to get local governments involved in overseeing basic, street grid-like “dark” (passive, unlit with electronics) fiber available at a set, wholesale price to a zillion retail providers of access and services. There’s plenty of patient capital sloshing around the US that would be attracted to the steady, reliable returns this kind of investment will return. That investment could be made in the form of private lending or government bonds; the important element is that the resulting basic network be a wholesale facility that any retail actor can use at a reasonable, fair cost. The result: Instead of different wires competing side by side with one another, there would be one great basic facility available neutrally to every form of business. Your ISP could use that fiber in competition with 10 others; your traffic lights could use it to govern congestion; your energy grid could use it to measure and regulate consumption and use of renewables. (Here comes the much-touted Internet of Things, which, without fiber everywhere, is being built on sand.) At the same time, the government would stay out of providing and inventing retail services itself."

Data, including data from the FCC (promptly ignored by the agency) does support the argument that such open access networks result in better broadband, better customer service, and lower prices thanks to real competition. In fact, Google Fiber initially insisted it would support the open access model -- before promptly backing away from it. And some areas, like Huntsville, Alabama, are following through on building an open network, then inviting multiple ISPs (including Google Fiber) to come in and compete.

More competition means organic punishment for high prices, bad service, and net neutrality violations -- which in turn means fewer attempts to fix this issue using often ham-fisted attempts at regulating a moving train.

The problem: incumbent ISPs effectively run massive chunks of our government, to the point where they quite-literally write telecom law (usually via ALEC or some other third-party, legislation ghostwriting apparatus). That includes the twenty-some odd state laws preventing towns and cities from making telecom infrastructure decisions for themselves, lest they might upset somebody at AT&T, Verizon, Charter or Comcast.

Like so many sectors, you can't really fix what ails the broadband industry until you fix the underlying legislative rot that lets companies use campaign contributions and disinformation to dictate garbage technology policy in the first place. So sure, open access networks should absolutely be pursued where possible, but voting out politicians whose entire function appears to be to protect broken mono/duopoly markets (looking at you, Marsha Blackburn) would need to be the very first step in what's an achievable but Sisyphean climb toward better broadband.

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Filed Under: broadband, competition, google fiber, muni broadband, susan crawford

Companies: google