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Google Invites Jacksonville, OKC, and Tampa to Contemplate Fiber; Northeast Need Not Apply

google fiberGoogle Fiber today announced it would accept applications from Oklahoma City, Jacksonville, and Tampa to become the next cities qualified for its fiber to the home service.

We’re inviting Oklahoma City, OK, Jacksonville, FL and Tampa, FL, to explore bringing Google Fiber to their communities, as we did last month with three other cities. These growing tech-hubs have a strong entrepreneurial spirit and commitment to small business growth. Their list of accolades is long—from Jacksonville’s title as a top 10 city for tech jobs, to Tampa Bay’s #2 spot on the list of best cities for young entrepreneurs, to Oklahoma City’s recognition as the #1 city to launch a business. One of our goals is to make sure speed isn’t an accidental ceiling for how people and businesses use the Web, and these cities are the perfect places to show what’s possible with gigabit Internet.

Google continues its informal boycott of the northeastern United States, where community interest in fiber service has been rebuffed through a lack of responsiveness.

The three latest cities will have to prove they can meet Google’s extensive list of requirements on everything from zoning to pole attachment access and fees. Things that tend to upset Google include endless zoning paperwork, intransigent bureaucracy, and dealing with an excess of county, city, town, and village governments (states in the northeast are also often notorious for layers of local government, all demanding compliance with local codes.) Communities are even expected to get their arborist on board.

google fiber 10 15

Local governments that take the attitude Google must win them over are unlikely to ever see the service. Those that bend over backwards to accommodate the fiber project are the ones managing successful applications. In other words, ask not what Google can do for you, ask what you can do for Google.

Tampa is the first city invited to apply that is also served by Verizon FiOS, although Verizon is in the process of selling its wired networks in Florida to Frontier Communications. Tampa’s cable competitor is Bright House Networks, itself in the process of being sold to Charter Communications. Jacksonville is Comcast and AT&T country and OKC is served by AT&T and Cox Communications.

Making it to the invitation list does not guarantee Google Fiber service, although most local governments are lobbied by their constituents to do whatever is necessary to secure fiber competition.

Cable’s Fiber Fears: Broadband Market Share Drops to 40% or Less When Fiber Competition Arrives

The magic of fiber

The magic of fiber

Ever wonder why Comcast, one of the strongest defenders of classic coaxial-based cable technology, is suddenly getting on board the fiber-to-the-home bandwagon? New research suggests if they don’t, their market share could fall to 40% or less if a serious fiber competitor arrives.

“There’s some sort of magic associated with fiber,” John Caezza, president of Arris’s Access Technologies division, told Multichannel News. “Everyone thinks it’s better than [cable technology].”

The risks to the cable industry are clear: be prepared to upgrade or face customer losses.

Craig Moffett of Moffett Nathanson has never been a cheerleader for fiber to the home service. In 2008, Moffett vilified Verizon for its investment in a major fiber upgrade we know today as FiOS to replace its aging copper infrastructure, complaining it was too expensive and was overkill for most residential customers. He was more tolerant of AT&T’s less-costly fiber to the neighborhood approach, dubbed U-verse, that still used traditional telephone lines to deliver service into the home. Because U-verse did not need AT&T to replace wiring at each customer location, the cost savings were considerable. But the cost-capability compromise left AT&T with a less robust platform, with broadband speeds initially limited to a maximum of around 24Mbps.

While phone companies like AT&T and Verizon were saddled with the enormous cost of tearing out decades-old obsolete phone wiring to varying degrees, the cable industry seemed well positioned with a mature, yet still recent hybrid fiber-coaxial (HFC) platform that was upgraded in the 1990s in many cities. While still partly reliant on the same RG-6 and RG-11 coaxial cable used since the first days of cable television, cable companies also invested in fiber optics to bring services from distant headends to each town, removing some of the copper from their networks without the huge expense of bringing fiber all the way to customer homes.

For Moffett, it was the cable industry that had the network with room to grow without spending huge amounts of capital on upgrades. He has touted cable stocks ever since.



What worries Moffett now isn’t Google, Frontier, CenturyLink, or even Verizon. He’s concerned about AT&T.

As part of its commitment to win approval of its merger with DirecTV, AT&T promised regulators in June it would expand AT&T U-verse with GigaPower — AT&T’s gigabit fiber to the home upgrade — to at least 11.7 million homes, nine million more than it has ever promised before. Comcast has a 32% overlap with AT&T U-verse, compared to Time Warner Cable (26%), Charter Communications (32%), Bright House Networks (25%) and Cox Communications (25%). Comcast had promised faster broadband with the advent of DOCSIS 3.1 beginning as early as next year. But the company isn’t willing to wait around to watch AT&T and others steal its speed-craving customers. This spring, it promised 2Gbps Gigabit Pro fiber to the home service to customers living within 1/3rd of a mile of the nearest Comcast fiber line.

Some in the cable industry complain Google’s huge marketing operation has saddled cable broadband with a bad rap — ‘it’s yesterday’s news, with Google Fiber representing the future.’ The marketing war has been largely won by Google, they say, leaving consumers convinced fiber is the better and more reliable technology, and they need it more than the cable company.

Cable’s defense is to consider some marketing changes of its own — including the idea of dropping the name “cable” from the business altogether, because it implies older technology. But despite any name change, most cable companies will continue to rely on HFC infrastructure for at least several more years, despite claims they are bringing their own middle mile fiber networks closer to customers than ever. Cable operators now serve an average of 400 homes from each cable node. Some cable companies like Comcast plan to cut the number of customers sharing a node to around 100-125 homes, which means fewer customers will share the same broadband connection. But in the end, that will make cable comparable at best to a fiber to the neighborhood network, still hampered to some degree by the presence of legacy coaxial copper cable. The industry believes most consumers will never see the limitations, and for those that do, a limited fiber buildout with a steep installation fee may keep costs (and demand) down to those who need the fastest possible speeds and are willing to pay to get them.

CableLabs_TaglineThat philosophy may still cost cable companies customers if a fiber competitor doesn’t have to compromise speed and performance and can afford to charge less.

The top 10 U.S. cable companies currently account for 60% of the residential broadband market and 86% of all broadband net additions in the first quarter of 2015, says Leichtman Research Group.

Moffett predicts cable broadband will only capture 40% of share in markets where it faces a fiber to the home competitor (Google, EPB, Greenlight, Verizon FiOS), 55% in markets served by a fiber to the neighborhood competitor (U-verse, Prism), and 60% where the competition only sells DSL (most Frontier, Windstream service areas). Nationwide, AT&T’s newest gigabit fiber commitment could cost the cable industry 2.4% of the whole residential broadband market, Moffett said.

Phil McKinney, president and CEO of CableLabs, believes DOCSIS 3.1 — the next standard for cable broadband — can easily stand toe to toe with fiber to the home providers.



“I think it [HFC] has tremendous life, and we are going to be riding it all day long,” Werner said. DOCSIS 3.1 “is definitely going to be our go-to animal. Due to ubiquity, we can go out and virtually serve all of our [customers] very quickly.”

Cable companies claim their speed increases reach all of their customers in a given area at the same time without playing games with “fiberhoods” or waiting for incremental service upgrades common with Google Fiber or AT&T’s U-verse. Customers, the industry says, also appreciate DOCSIS upgrades bring no service disruption and nobody has to come to the home to install or upgrade service.

“The cable industry has more fiber in the ground than each fiber provider in the world,” McKinney argues. “If you look at total fiber strand miles, there’s more fiber under management and under control of the [cable] operators than anybody else combined.”

That may be true, but Moffett thinks it is only natural shareholders may eventually punish the stocks of cable operators that will face competition from AT&T’s U-verse with GigaPower. There is precedent. Cablevision serves customers in New York, Connecticut, and New Jersey and faces fierce competition from Verizon FiOS in most of its service areas. That competition has been brutal, occasionally made worse in periodic price wars. What may be protecting cable stocks so far is the fact AT&T competition will only affect, at most, 32% of the impacted cable operators’ service areas.

AT&T’s gigabit network has also proved itself to be more press release than performance, with very limited availability in the cities where it claims to be available. Verizon FiOS, in contrast, is widely available in most of Cablevision’s service area.

Still, Comcast is hoping it can hang on to premium customers who demand the very fastest speeds and performance with targeted fiber.

“Gigabit Pro is really for those customers who have got extreme needs,” said Tony Werner, Comcast’s executive vice president and chief technology officer.

ConnectHome: President Obama Announces Affordable Broadband Options for the Poor

google fiberWASHINGTON/DURANT, Okla. (Reuters) – U.S. President Barack Obama announced a pilot project on Wednesday aimed at expanding broadband access for people who live in public housing, part of an effort to close what Obama called the “digital divide” between rich and poor.

Eight Internet service providers, including Google Inc and Sprint Corp, have signed on to make the Internet cheaper and more accessible in 27 cities and the Choctaw Tribal Nation in Durant, Oklahoma.

Private and public institutions have pledged to invest $70 million in the plan. The federal government is only contributing $50,000, Julian Castro, the secretary of Housing and Urban Development, told reporters on a conference call.

The initiative will reach 275,000 households with almost 200,000 children.

centurylink“While high-speed Internet access is given for millions of Americans, it’s out of reach for far too many,” Obama said at Durant High School to a crowd that included many children in traditional tribal garb.

The Choctaw Tribal Nation is working with four local providers to bring the Internet to 425 homes.

In Atlanta, Durham, Kansas City and Nashville, Google will provide free Internet connections in some public housing areas.

COX_RES_RGBIn select markets, Sprint will offer free wireless broadband access to families with kids in public housing. In Seattle, CenturyLink Inc will provide broadband service for public housing residents for $9.95 a month for the first year.

Cox Communications Inc [COXC.UL] is offering home Internet for $9.95 a month to families with kids in school in four cities in Georgia, Louisiana and Connecticut.

The program also includes free training and technical support. Best Buy Co Inc will offer free training to the Choctaw Tribal Nation and in some cities, the White House said.

(By Alex Wilts and Julia Edwards; Reporting by Alex Wilts and Roberta Rampton; Editing by Alan Crosby and Lisa Shumaker)

Google Unveils Project Fi Wireless Service: $20/Mo Voice/Text + $10/GB Data Plan That Credits Back Unused Data

google fiGoogle today unveiled their new wireless service, dubbed Project Fi, the first wireless carrier that combines the coverage of two competing cellular providers — Sprint and T-Mobile — to deliver affordable wireless service and a data plan that rebates back any unused portion of your monthly allowance. There are no term contracts, early termination fees, or overlimit penalty charges.

Google’s calling plan starts with Fi Basics for $20 per month. This includes:

  • Unlimited domestic talk and text;
  • Unlimited international texts;
  • Low-cost international calls;
  • Wi-Fi tethering;
  • Coverage in 120+ countries (Unlimited international texts are included in the plan, Cellular calls cost 20c per minute. If calling over Wi-Fi, per-minute costs vary based on which country you’re calling and you’re charged only for outbound calls.)

There is no unlimited data plan, presumably because neither T-Mobile or Sprint was willing to allow Google to offer one. Google tries to turn that into a plus by telling customers they should only pay for the data they actually use. The 2G/3G/4G data plan is $10/GB, sold in 1GB increments up to 10GB. Whatever data you do not use is converted into a cash amount credited to the following month’s bill. Instead of rolling over data, you roll over dollars. If you exceed your allowance, there are no penalty overlimit fees. Instead, you are charged $10 for an additional gigabyte of usage, with the same privilege of getting a cash credit applied to your next bill for any data you didn’t use.

Google assumes you will spend most of your time connected to Wi-Fi, where it offers free Wi-Fi calling and texting. If you lose your Wi-Fi connection, the phone will connect to either Sprint or T-Mobile’s network without losing a call in-progress. Another unique aspect of the service is that your mobile phone number lives in the cloud, so you can talk and text with your number on just about any phone, tablet or laptop using Google Hangouts.

The Nexus 6 is a real handful. It's also the only phone that will currently work on Google Fi.

The Nexus 6 is a real handful. It’s also the only phone that will work on Google Fi.

Google Project Fi relies on Sprint and T-Mobile’s combined networks to deliver coverage, trying to satisfy customers seeking Verizon or AT&T-like coverage. Google’s service seamlessly chooses Wi-Fi first, followed by Sprint or T-Mobile depending on which offers the best 4G signal at your location.

Although the service has been anticipated for some time, there are some caveats to consider before rushing to sign up.

First, you cannot sign-up immediately, you can only request an invitation. As with many other new Google projects, invitation-only service means it could be days, weeks, or even a month before you can sign-up.

Second, a view of Google’s coverage map shows Project Fi has substantially reduced dead spots, but has not eliminated them. Project Fi would likely appeal to Sprint or T-Mobile customers now frustrated by their suburban coverage. Chances are good that between the two carriers, one will deliver a robust signal even if the other does not. But rural areas have always been bypassed by both carriers and this makes Project Fi a bad choice if Sprint and T-Mobile are not good options where you live or work.

For example, much of eastern Kentucky, virtually the entire state of West Virginia, and western Virginia offer little to no 3G/4G coverage. Google Fi only promises 2G coverage in these areas, through a roaming agreement T-Mobile or Sprint has with a larger carrier.

Third, unless you already own a Nexus 6, you will be spending at least $650 to buy a new smartphone. Google will initially only support the Nexus 6 for Project Fi, because it is the only phone capable of switching between Google’s wireless partners. It comes in your choice of colors, if your choice is “Midnight Blue.” The smartphone offers two storage sizes—32GB ($649) and 64GB ($699). You can buy the Nexus 6 up front or finance your phone at 0% interest or fees for 24 months at $27.04/month for the 32GB option or $29.12/month for the 64GB option. A credit check is required for the financing option.

Fourth, there are no family plan options. Each phone is assigned to its own account. If you intend to switch your family of four, you will be dealing with four individual accounts (and a whopping $2,600 to acquire four Nexus 6 phones). Because of the invitation-only approach now in effect, it may take some time to get all of your family members up and running.

Finally, Google intends that its mobile service effectively sells itself. That means they are not offering promotions to sign up and will not pay your existing carrier to cover any early termination fees. You can port your current landline or mobile telephone number to the service. Google does not disclose any fees for doing so.

http://www.phillipdampier.com/video/Google Project Fi 4-22-15.mp4

Google produced this introductory video about its new wireless service: Google Project Fi. (1:56)

Google Fiber Headed to Atlanta, Charlotte, Raleigh-Durham, N.C., Nashville; Avoids Verizon FiOS Country

atlanta fiberGoogle has announced it will bring its fiber broadband service to four new cities — Atlanta, Charlotte, N.C., Raleigh-Durham, N.C. and Nashville, Tenn., according to a report on Google’s Fiber blog.

In a familiar pattern, Google recently sent invitations to local news organizations in those four cities to attend events this week, without identifying the subject.

As with earlier similar events, the topic was the local launch of Google Fiber.

The cities were all on Google’s 2014 list for possible expansion. Those left out (for now) include Salt Lake City, San Antonio, Phoenix, Portland, Ore., and San Jose, Calif. Google recently told city officials in those communities it was still contemplating projects, but remain undecided for now.

After the announcements this week, it will take at least one year before Google is ready to light up the first “fiberhoods” in the cities, usually selected based on customer signups.

Google will challenge Comcast and AT&T in Georgia, Time Warner Cable and CenturyLink in North Carolina, and Comcast and AT&T in Nashville. In Atlanta, the fiber build will not only include Atlanta, but also Avondale Estates, Brookhaven, College Park, Decatur, East Point, Hapeville, Sandy Springs and Smyrna.


Google will offer unlimited gigabit broadband service for an expected $70 a month. AT&T limits U-verse customers to 250GB in Georgia and Tennessee, and Comcast has subjected both Atlanta and Nashville to its compulsory usage cap experiments, setting a monthly usage allowance at 300GB.

Time Warner Cable does not limit broadband customers in North Carolina, but the Republican-dominated state government is also hostile to community-owned broadband, making it unlikely either Raleigh-Durham or Charlotte will see public broadband competition anytime soon.

Fiber-is-comingGoogle officials have also been reportedly sensitive to local government red tape and regulation. In Portland, the Journal reports Google has put any fiber expansion on hold there because Oregon tax-assessment rules would value Google’s property based on the value of their intangible assets, such as brand. That would cause Google’s property taxes in Oregon to soar. Until the Oregon state legislature makes it clear such rules would not apply to Google Fiber, there will be no Google Fiber in Portland.

Google has also once again shown its reluctance to consider any community or region where Verizon FiOS now provides fiber optic service. The entire northeastern United States, largely dominated by Verizon, has been “no-go” territory for Google, with no communities making it to their list for possible future expansion.

Among the collateral damage are Verizon-less communities in northern New England served by FairPoint Communications and Comcast and portions of western New York served by Frontier Communications where Time Warner Cable has overwhelming dominance with 700,000 subscribers out of 875,000 total households in the Buffalo and Rochester markets.

Wall Street continues to grumble about the Google Fiber experiment, concerned about the high cost of fiber infrastructure and the potential it will create profit-killing price wars that will cut prices for consumers but cost every competitor revenue.

http://www.phillipdampier.com/video/WSOC Charlotte Mayor Google Fiber is coming to Charlotte 1-27-15.flv

Charlotte city manager Ron Carlee spoke exclusively to WSOC-TV’s Jenna Deery about how Charlotte won Google over to bring its fiber service to the community. Having a close working relationship between city infrastructure agencies and Google was essential, as was cutting red tape and bureaucracy. (2:10)

Google, Cablevision Challenge Traditional Cell Phone Plans, Wireless Usage Caps With Cheap Alternatives

freewheelLuxurious wireless industry profits of up to 50 percent earned from selling some of the world’s most expensive cellular services may soon be a thing of the past as Google and Cablevision prepare to disrupt the market with cheap competition.

With more than 80 percent of all wireless data traffic now moving over Wi-Fi, prices for wireless data services should be in decline, but the reverse has been true. AT&T and Verizon Wireless have banked future profits by dumping unlimited data plans and monetizing wireless usage, predicting a dependable spike in revenue from growing data consumption. Instead of charging customers a flat $30 for unlimited data, carriers like Verizon have switched to plans with voice, texting, and just 1GB of wireless usage at around $60 a month, with each additional gigabyte priced at $15 a month.

With the majority of cell phone customers in the U.S. signed up with AT&T or Verizon’s nearly identical plans, their revenue has soared. Sprint and T-Mobile have modestly challenged the two industry leaders offering cheaper plans, some with unlimited data, but their smaller cellular networks and more limited coverage areas have left many customers wary about switching.

Google intends to remind Americans that the majority of data usage occurs over Wi-Fi networks that don’t require an expensive data plan or enormous 4G network. The search engine giant will launch its own wireless service that depends on Wi-Fi at home and work and combines the networks of Sprint and T-Mobile while on the go, switching automatically to the provider with the best signal and performance.

googleCablevision’s offer, in contrast, will rely entirely on Wi-Fi to power its mobile calling, texting, and data services. Dubbed “Freewheel,” non-Cablevision customers can sign up starting in February for $29.95 a month. Current Cablevision broadband customers get a price break — $9.95 a month.

Cablevision’s dense service area in parts of New York City, Long Island, northern New Jersey and Connecticut offers ample access to Wi-Fi. Cablevision chief operating officer Kristin Dolan said its new service would work best in Wi-Fi dense areas such as college campuses, business districts, and multi-dwelling units.

New York City is working towards its own ubiquitous Wi-Fi network, which could theoretically blanket the city with enough hotspots to make Cablevision’s service area seamless. But the biggest deterrent to dumping your current cell phone provider is likely to be available coverage areas. Google’s answer to that problem is combining the networks of both Sprint and T-Mobile, offering customers access to the best-performing carrier in any particular area. While that isn’t likely to solve coverage issues in states like West Virginia and the Mountain West, where only AT&T and Verizon Wireless offer serious coverage, it will likely be sustainable in large and medium-sized cities where at least one of the two smaller carriers has a solid network of cell towers.

Comparing the Wireless Alternative Providers

  • Google Wireless will offer seamless access to Wi-Fi, Sprint and T-Mobile voice, SMS, and mobile data at an undetermined price. Likely to arrive by the summer of 2015;
  • Cablevision Freewheel depends entirely on Wi-Fi to power unlimited voice, SMS, and data. Launches in February for $29.95/mo ($9.95/mo for Cablevision broadband customers);
  • FreedomPop Wi-Fi ($5/mo) offers an Android app-based “key” to open unlimited Wi-Fi access to 10 million AT&T, Google, and cable industry hotspots nationwide for calling, texting, and mobile data;
  • Republic Wireless developed its own protocol to properly hand off phone calls between different networks without dropping it. Calling plans range from $5-40 a month. Less expensive plans are Wi-Fi only, pricier plans include access to Sprint’s network;
  • Scratch Wireless charges once for its device – a Motorola Photon Q ($99) and everything else is free, as long as you have access to Wi-Fi. Cell-based texting is also free, as a courtesy. If you need voice calling or wireless data when outside the range of a hotspot, you can buy “access passes” to Sprint’s network at prices ranging from $1.99 a day each for voice and data access to $24.99 a month for unlimited data and $14.99 a month for unlimited voice.
Scratch Wireless

Scratch Wireless

Google is pushing the FCC to open new unlicensed spectrum for expanded Wi-Fi to accommodate the growing number of wireless hotspots that are facing co-interference issues.

Wi-Fi-based wireless providers are likely to grow once coverage concerns are eased and there is reliable service as customers hop from hotspot to hotspot. The cable industry has aggressively deployed Wi-Fi access with a potential to introduce wireless service. Comcast is already providing broadband customers with network gateways that offer built-in guest access to other Comcast customers, with the potential of using a crowdsourced network of customers to power Wi-Fi coverage across its service areas. FreedomPop will eventually seek customers to volunteer access to their home or business networks for fellow users as well.

AT&T and Verizon are banking on their robust networks and coverage areas to protect their customer base. Verizon Wireless, in particular, has refused to engage in price wars with competitors, claiming Verizon customers are willing to pay more to access the company’s huge wireless coverage area. AT&T told the Wall Street Journal its customers want seamless access to its network to stay connected wherever they go.

Verizon’s chief financial officer Fran Shammo appeared unfazed by the recent developments. On last week’s conference call with investors, Shammo dismissed Google’s entry as simply another reseller of Sprint’s network. He added Google has no idea about the challenges it will face dealing directly with customers in a service and support capacity. While Google’s approach to combine the coverage of T-Mobile and Sprint together is a novel idea, Shammo thinks there isn’t much to see.

“Resellers, or people leasing the network from carriers, have been around for 15 years,” Shammo said. “It’s a complex issue.”

Investors are taking a cautious wait-and-see approach to the recent developments. Google’s new offering is likely to offer plans that are philosophically compatible with Google’s larger business agenda. Challenging the traditional business models of AT&T and Verizon that have implemented usage caps and usage pricing may be at the top of Google’s list. The new offering could give large data allowances at a low-cost and/or unlimited wireless data for a flat price. Such plans may actually steal price-sensitive customers away from Sprint and T-Mobile, at least initially. Sprint is clearly worried about that, so it has a built-in escape clause that allows a termination of its network agreement with Google almost at will.

http://www.phillipdampier.com/video/WSJ Google Cablevision Challenge Wireless Industry 1-26-15.flv

The Wall Street Journal talks about the trend towards Wi-Fi based mobile calling networks. (1:59)

Google Fiber Prices Announced in Austin: No Surprises – 5/1Mbps Free, 1Gbps $70/Month

google fiberAustin residents will receive Google Fiber service under three rate plans: $70 for 1,000/1,000Mbps or 5/1Mbps at no charge after paying a $300 construction fee. A package including television costs $130 a month.

Google Fiber announced its prices this week in anticipation of a December launch in the capital city of Texas. But Google Fiber will arrive with at least two competitors beating them to the gigabit space: Grande Communications and AT&T.

Austin is the first city in the country to have three concurrent gigabit providers. Only Time Warner Cable has elected to sit out the city’s gigabit broadband fight. Google Fiber is expected to face stiffer competition in Austin than in Kansas City and Provo, where it also operates gigabit fiber networks. AT&T U-verse with GigaPower matches Google’s $70 price and San Marcos-based Grande Communications beats it, charging $64.99 for its 1,000Mbps service.

Google is sweetening the deal by converting the former home of a children’s museum into a “Fiber Space,” a community center at 201 Colorado Street – hosting concerts, community meetings, and clubs, in addition to showcasing Google’s fiber network.

As with AT&T’s gigabit U-verse upgrade, only a limited number of residents in Austin will initially be able to get the new fiber service. Google is initially lighting up areas in south and southeastern Austin. For some, the wait to eventually sign up could take up to several years as Google slowly builds out its network in the city of 885,000 people.

Uh Oh Time Warner Cable & AT&T: Google Fiber Winning 75% of Customers in Kansas City

google fiberDespite years of arguments from telecom companies that residential customers don’t need or want super-fast broadband speeds, the people of Kansas City think otherwise.

A survey by Wall Street analyst Bernstein Research discovered Google Fiber has signed up almost 75% of homes offered the gigabit fiber-to-the-home service.

“[Customer] penetration measured by our survey was much higher than we had expected,” said Berstein Research analyst Carlos Kirjner.

Haynes and Company conducted a door-to-door survey of more than 200 homes within Google Fiber’s service area in Kansas City, visiting wealthy, middle-income, and challenged urban areas. Despite claims from cable and phone companies that Google is only interested in choosing to offer fiber service in affluent areas, Bernstein Research found Google was doing very well in every neighborhood.

In the poorest neighborhoods, Google is still winning a 30% market share — way above estimates, with customers attracted to Google’s free 5/1Mbps broadband service (customers must pay a recently lowered $30 construction fee). Customer penetration rates in urban areas could grow even higher if Google allowed customers with free Internet service access to its $50 cable television package, now only available to gigabit broadband customers.

Google's service plans

Google’s service plans

In middle and upper income neighborhoods, Google has decisively captured a 75% market share — clearly a major problem for incumbent competitors AT&T and Time Warner Cable, which could lose well over half their customers.

Even more worrying for the cable and phone companies, Google is grabbing customers primarily on word-of-mouth testimonials from satisfied customers. At least 98% of Kansas City residents surveyed were aware of Google’s fiber offering. At least 52% said they would “definitely or probably” buy Google Fiber, 25% said they might or might not purchase the service, and only 19% said they definitely or probably wouldn’t buy it.

“Our survey suggests that Google Fiber has gained a significant foothold in its early Kansas City fiberhoods. Consumers are highly satisfied with Google Fiber service, suggesting its share gains are likely not done yet,” Kirjner added.

Bernstein believes Google can grab an even larger share of the Kansas City market by returning to mature fiberhoods in the future with aggressive marketing campaigns that could easily win even more customers.

bernsteinresearchIf Bernstein’s research holds true in other markets, Google Fiber could eventually become a serious competitive threat to both cable and telephone companies, depending on how quickly they expand. Google Fiber is also likely to become a profitable service for the search engine giant, despite the high initial expense of wiring communities for fiber optics.

Bernstein predicts that Google Fiber is positioned to capture a minimum of 50% of the Kansas City market within four years, knocking Time Warner Cable’s out of first place for the first time and posing a serious financial threat for AT&T’s less-capable U-verse platform, which has only attracted a minority share of the market. At least 40% of customers seeking a broadband and cable television package will choose Google Fiber, Bernstein Research predicts.

In almost every market, the traditional cable operator still maintains the largest share of customers. Telephone company competitors usually don’t win more than 20-30% of a market, although Verizon FiOS’ fiber network does better than most. Satellite providers only compete for television customers, which is increasingly less profitable than broadband service.

These kinds of results underline Bernstein Research’s conviction Google Fiber is not an experiment or publicity stunt that the cable industry often claims it to be. Nor does the research firm believe Google is only interested in forcing cable and phone companies to raise broadband speeds. Instead, it is becoming increasingly clear Google is prepared to gradually expand its fiber network across the country, at least in areas bypassed by Verizon FiOS or other fiber networks. However, it will take many years for this to happen.

Charlotte Lusts for Fibrant’s Fiber-to-the-Home Broadband Speed They Won’t Get Anytime Soon

fibrant_logo_headerA 2011 state law largely written by Time Warner Cable will likely keep Charlotte, N.C. waiting for fiber broadband that nearby Salisbury has had since 2010.

North Carolina is dominated by Time Warner Cable, AT&T and CenturyLink. Google and AT&T recently expressed interest in bringing their fiber networks to the home in several cities in the state, but neither have put a shovel in the ground.

Fibrant, a community owned broadband provider in Salisbury, northeast of Charlotte, not only laid 250 miles of fiber optics, it has been open for business since November 2010. It was just in time for the publicly owned venture, joining a growing number of community providers like Wilson’s Greenlight and Mooresville, Davidson and Cornelius’ MI-Connection. Time Warner Cable’s lobbyists spent several years pushing for legislation restricting the development of these new competitors and when Republicans took control of the General Assembly in 2011, they finally succeeded. Today, launching or expanding community broadband networks in North Carolina has been made nearly impossible by the law, modeled after a bill developed by the American Legislative Exchange Council (ALEC).

With fiber fever gripping the state, Fibrant has gotten a lot of attention from Charlotte media because it provides the type of service other providers are only talking about. Fibrant offers residents cable television, phone, and broadband and competes directly with Time Warner Cable and AT&T. Although not the cheapest option in town, Fibrant is certainly the fastest and local residents are gradually taking their business to the community alternative.

Charlotte, N.C. is surrounded by community providers like Fibrant in Salisbury and MI-Connection in the Mooresville area.

Charlotte, N.C. is surrounded by community providers like Fibrant in Salisbury and MI-Connection in the Mooresville area.

“A lot faster Internet speeds, a lot clearer phone calls,” said Sidewalk Deli owner Rick Anderson-McCombs, who switched to Fibrant after 15 years with another provider. His mother, Anganetta Dover told WSOC-TV, “I think we save about $30 to $40 a month with Fibrant and the advantages of having the speed is so much better.”

Julianne Goodman cut cable’s cord, dropping Time Warner Cable TV service in favor of Netflix. To support her online streaming habit, she switched to Fibrant, which offers faster Internet speeds than the cable company.

Commercial customers are also switching, predominately away from AT&T in favor of Fibrant.

“Businesses love us because we don’t restrict them on uploads,” one Fibrant worker told WCNC-TV. “So when they want to send files, it’s practically instantaneous.”

Fibrant offers synchronous broadband speeds, which mean the download and upload speeds are the same. Cable broadband technology always favors download speeds over upload, and Time Warner Cable’s fastest upstream speed remains stuck at 5Mbps in North Carolina.

AT&T offers a mix of DSL and U-verse fiber to the neighborhood service in North Carolina. Maximum download speed for most customers is around 24Mbps. AT&T has made a vague commitment to increase those speeds, but customers report difficulty qualifying for upgrades.

Time Warner Cable is a big player in the largest city in North Carolina, evident as soon as you spot the Time Warner Cable Arena on East Trade Street in downtown Charlotte.

Taxpayer dollars are also funneled to the cable company.

Time Warner Cable’s $82 million data center won the company a $2.9 million Job Development Investment Grant. Charlotte’s News & Observer noted the nation’s second largest cable company also received $3 million in state incentives.

When communities like Salisbury approached providers about improving broadband speeds, they were shown the door.

http://www.phillipdampier.com/video/WCNC Charlotte Fibrant Already Provides Fiber 3-5-14.mp4

WCNC-TV reports that with Google expressing an interest in providing fiber service in Charlotte, Salisbury’s Fibrant has been offering service since 2010. (2:57)

“Our citizens asked for high-speed Internet,” says Doug Paris, Salisbury’s city manager. “We met with the incumbent providers [like Time Warner and AT&T, and that did not fit within their business plans.”

Salisbury and Wilson, among others, elected to build their own networks. The decision to enter the broadband business came under immediate attack from incumbent providers and a range of conservative astroturf and sock puppet political groups often secretly funded by the phone and cable companies.

Rep. Avila with Marc Trathen, Time Warner Cable's top lobbyist (right) Photo by: Bob Sepe of Action Audits

Rep. Avila, a ban proponent, meets with Marc Trathen, Time Warner Cable’s top lobbyist (right) (Photo: Bob Sepe)

Critics of Fibrant launched an attack website against the venture (it stopped updating in March, 2012), suggesting the fiber venture would bankrupt the city. One brochure even calls Stop the Cap! part of a high-priced consultant cabal of “Judas goats for big fiber” (for the record, Stop the Cap! was not/is not paid a penny to advocate for Fibrant or any other provider).

Opponents also characterize Fibrant as communism in action and have distributed editorial cartoons depicting Fibrant service technicians in Soviet military uniforms guarding Salisbury’s broadband gulag.

In January of this year, city officials were able to report positive news. Fibrant has begun to turn a profit after generating $2,223,678 in the revenue from July through December, 2013. Fibrant lost $4.1 million during the previous fiscal year. That is an improvement over earlier years when the venture borrowed more than $7 million from the city’s water and sewer capital reserve fund, repaying the loans at 1 percent interest. The city believes the $33 million broadband network will break even this year — just four years after launching.

Fibrant is certainly no Time Warner Cable or AT&T, having fewer than 3,000 customers in the Salisbury city limits. But it does have a market share of 21 percent, comparable to what AT&T U-verse has achieved in many of its markets.

Fibrant also has the highest average revenue per customer among broadband providers in the city — $129 a month vs. $121 for Time Warner Cable. Customers spend more for the faster speeds Fibrant offers.

Some residents wonder if Fibrant will be successful if or when AT&T and Google begin offering fiber service. Both companies have made a splash in Charlotte’s newspapers and television news about their fiber plans, which exist only on paper in the form of press releases. Neither provider has targeted Salisbury for upgrades and nobody can predict whether either will ultimately bring fiber service to the city of Charlotte.

Those clamoring for fiber broadband speeds under the state’s anti-community broadband law will have to move to one of a handful of grandfathered communities in North Carolina where forward-thinking leaders actually built the fiber networks private companies are still only talking about.

http://www.phillipdampier.com/video/WSOC Charlotte Charlotte could gain from fiber optic network already in place 4-22-14.flv

WSOC-TV in Charlotte reports Salisbury customers are happy with Fibrant service and the competition it provides AT&T and Time Warner Cable. (2:12)

Google Fiber Threat Cited in Cincinnati Bell’s Decision to Sell Wireless Division to Verizon Wireless

Phillip Dampier April 8, 2014 Cincinnati Bell, Competition, Consumer News, Google Fiber & Wireless, Verizon, Video, Wireless Broadband Comments Off on Google Fiber Threat Cited in Cincinnati Bell’s Decision to Sell Wireless Division to Verizon Wireless

cincinnati bellCincinnati Bell threw in the towel on its wireless mobile business Monday when it decided to sell its wireless spectrum licenses, network, and 340,000 customers for $210 million to its larger rival Verizon Wireless.

While most analysts say the transaction is the inevitable outcome of a wireless industry now dedicated to consolidation, at least one analyst said the threat of Google Fiber eventually entering the Cincinnati market may have also contributed to the decision to sell.

The future of Cincinnati Bell’s wireless division had been questioned for more than a year, ever since the arrival of the company’s newest CEO Ted Torbeck in January 2013. Cincinnati Bell, one of the last independent holdouts of the Bell System breakup that have not been reabsorbed by AT&T or Verizon, had struggled since Torbeck’s predecessor made some bad bets on acquisitions, including an investment in microwave communications provider Broadwing that left the company with more than $2 billion in debt in 2004. Another $526 million acquisition of data center Cyrus One left the company further in debt.



Torbeck promised a frank evaluation of Cincinnati Bell’s operations last year and keeping its declining wireless division no longer made sense with Torbeck’s focus on replacing the company’s aging copper wire network with fiber optics.

For years, Cincinnati Bell’s biggest competitor has been Time Warner Cable, which has taken away many of its landline customers. Cincinnati Bell’s mobile phone division was created to protect its core business, picking up wireless subscribers as customers dropped their landlines. But the cable company’s bundled service packages made landline service much less expensive than sticking with the phone company, and many wireless customers prefer a national wireless phone company offering better coverage and a wider selection of devices.

Rampant wireless industry consolidation has concentrated most of the cell phone market in the hands of AT&T and Verizon Wireless, giving those two companies access to the most advanced and hottest devices while regional carriers made do offering customers less capable smartphones. Its competitors’ march towards 4G LTE network upgrades also challenged Cincinnati Bell with costly capital investments in a 4G HSPA+ network that Torbeck recently decided no longer made economic sense.

Cincinnati Bell’s wireless revenue for 2013 was $202 million, a decrease of 17 percent from 2012. The company also lost 58,000 subscribers last year, an unsustainable drop that showed few signs of stopping.

610px-Verizon-Wireless-Logo_svg“Our business has been in decline for five or six years,” Torbeck told the Cincinnati Business Courier. “This is absolutely the right time to make this deal. It was probably the highest value we could get at this point in time.”

Torbeck believes Cincinnati Bell’s best chance for a future lies with with fiber optics, capable of delivering phone service along with a robust broadband and television offering that can effectively compete with Time Warner Cable.

“We’ve got to grow market share in Cincinnati and fiber optics is the way to do it,” Torbeck said in 2013. “We have about 25 percent of the city covered and we think from a financial perspective we can get to 65 or 70 percent so we’ve got significant growth opportunity there.”

fiopticsLast year, Cincinnati Bell had passed 184,000 homes with fiber optics – a 28 percent market share. But only 52,000 homes subscribed to Fioptics — Cincinnati Bell’s fiber brand. Time Warner Cable had managed to keep many of its wavering 446,000 customers loyal to the cable company with aggressive discounting and customer retention offers. But now that many of those discounts have since expired, Torbeck wants to reach 650,000-700,000 homes in its service area covering southwestern Ohio and northern Kentucky and convince 50% of those customers to switch to fiber optics.

Torbeck isn’t interested in limiting his business to just greater Cincinnati either.

“At some point in time, we’d like to expand regionally into Indianapolis, Columbus,” Torbeck said. “Louisville is another opportunity. But that’s probably a little down the road. From a fiber standpoint, we could look at acquisitions and get into metro fiber. These are things we’re looking at, but these are things that are down the road. We got a lot of room for growth just here in Cincinnati.”

But financial analysts warned Cincinnati Bell’s enormous debt load limits the company’s potential to invest in expansion. Torbeck’s decision to sell off the company’s wireless unit is another step in reducing that debt and further investing in fiber optics expansion.

google fiberThe company’s unique position as the last remaining independent phone company that still bears the name of the telephone’s inventor may make the company a target for a takeover before Torbeck’s vision is realized. One analyst thinks Cincinnati Bell would be a natural target for Google, which has a recent record of repurposing fiber networks built by other companies as a cost-saving measure to further deploy Google Fiber.

“They are a small and cheap company with the infrastructure that Google could use,” said Brian Nichols. “My theory is that Google will buy undervalued companies like Cincy Bell to save on the mounting costs of buildouts, which could top $30 billion,“ Nichols wrote in an email to WCPO-TV.

Google did exactly that in Provo, Utah, acquiring struggling iProvo from the city government for $1 in return for agreeing to expand the fiber network to more homes.

Cincinnati’s local phone company would sell for considerably more than that, but it would still prove affordable for Google, which has a market value of $361 billion, about 470 times that of Cincinnati Bell.

cincCincinnati Bell has already spent about $300 million on Fioptics and plans to spend an extra $80 million this year on expansion. Before the network is complete, the phone company is likely to spend as much as $600 million on fiber upgrades. But the payoff has been higher revenue — $100 million last year alone, and a stabilizing business model that has reduced losses from landline cord-cutting. Telecom analyst Nicholas Puncer offers support for the investment, something rare for most Wall Street advisers.

“It’s a reasonable strategy,” Puncer said. “There’s only going to be more data going through networks in the future, not less. The way we consume content is going to be a lot different 10 years from now than it is today. This is their effort to be on the right side of that, giving people more options to receive that content.”

But if Google Fiber comes to town, it may not be enough.

“Google has an unprecedented luxury,” Nichols said in his email to WCPO. “They are [attaching] fiber to existing poles owned by AT&T (and other telecom companies), and then targeting areas where consumers agree for service before the network is even built. Given this demand, and its mere ability to operate in such a manner, I do think Cincinnati Bell will have major problems once that day comes (likely sooner rather than later). In fact, I don’t think they stand a chance of competing against Google.”

Cincinnati Bell said it will continue to offer wireless service for customers for the next 8 to 12 months. The company will notify customers with further details regarding transition assistance around the time of the closing, which is expected to be in the second half of 2014.

It was not immediately clear on Monday if the sale will impact jobs. Cincinnati Bell Wireless employs about 175 people, including retail store employees.

http://www.phillipdampier.com/video/WKRC Cincinnati Cincinnati Bell selling wireless spectrum to Verizon 4-8-14.flv

WKRC in Cincinnati reports on what the sale of Cincinnati Bell Wireless to Verizon Wireless means for customers. (1:24)

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