The Demise of Google Fiber Shows There Are No Easy Answers in Telecom

 

Even Google is stymied by telecom’s high barriers to entry. The effects of Title II may not help the situation.

 

When Google rolled out its fiber business in 2012, it was an appealingly easy solution for a difficult situation. Like a fairy godmother solving all of our problems with a sweep of her wand, Google was going to bring blazing fast 1 gigabit speed to homes across the country and, for as little as $70 per month, people were going to get access to Autobahn speeds previously only dreamed of on our American Superhighway.

With its fat wallet of cash, Google seemed well-positioned to do the expensive work of buying failed municipal broadband networks as well as building some of their own new networks, tearing up roads and sidewalks and laying its fiber in select neighborhoods. Kansas City, where Google piloted the fiber program, suddenly seemed poised to become the next internet startup hotspot.

But now it turns out the task was too much even for Google. The Wall Street Journal is reporting that Google’s parent company, Alphabet, is “rethinking” its fiber rollout plans in the face of mounting costs.  Confronted with the reality of today’s regulatory environment, the company appears to now be leapfrogging the morass entirely, jumping ahead to advanced wireless technologies – which could deliver speeds up to 10 gigabits per second – viewed by many as the broadband “game changer” for connectivity and speed.    

Google Fiber is a well-intentioned idea. We need more people to have better internet access so they can get the most out of the growing digital economy. Work is increasingly being done over the internet as companies move to cloud technology. Even applying for a job now usually requires internet access. Watching TV, shopping, and connecting with loved ones are all things increasingly being done online. Those who don’t have access or are operating from networks in need of modernization are at a severe disadvantage in today’s digital world.

But as Google is discovering, laying new miles of fiber is far from easy.

We can’t sit by and hope that by some miracle our networks will modernize on their own. Instead, we need all levels of government to renew their interest in and efforts to make it easier for companies building out our nation’s invisible infrastructure to upgrade existing networks or build new ones.

That means local government creating and adhering to a level playing field for all comers and an expedited permit approval process. At the state level, that means embracing the idea of modernized, next-generation networks instead of further requirements to put band aids on the copper telephone network that predates the majority of our population. At the federal level, that means creating incentives for investment through forward-looking regulations that offer consumers the protections they need while not handcuffing those investing the most capex into our digital economy.

The government is going to have to take a bigger role in these sorts of advancements going forward because thanks to the FCC’s decision to classify the internet as a utility under Title II of the Telecommunications Act, private industry is going to be even more reluctant to invest in big internet projects.

Far from bringing stability to the internet, the Title II decision threw the tech industry into disarray. Like Google Fiber, Title II was a quick fix to the problem of Net Neutrality but not the right one. Companies like Netflix and T-Mobile are pushing Title II’s envelope through various means. And when the next president replaces the Chairman of the FCC next summer with someone who potentially doesn’t believe they should enforce the Title II rule, any semblance of net neutrality goes out the window due to the ability of the Commission to forebear on any sections of Title II they don’t agree with or view as relevant. In California, the Public Utilities Commission has been rebuked for trying to slap its own rules on internet services, which is fortunately illegal. If 50 states got into the Internet regulation business, the disarray started by the FCC would degenerate into complete chaos.

This instability makes it hard for internet companies to plan for the future since forbearance removes any hint of certainty for these massive investments. To expect industry to invest in big projects that will bring more people online in this atmosphere is wishful thinking under these regulatory structures.

With much more regulatory elbow grease, we can meet the ideals that Google is striving for with its fiber program without waiting on a fairy godmother to do it for us.

Mike Montgomery is executive director of CALinnovates, a San Francisco-based technology advocacy coalition.

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