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July 13, 2012

How Google may turn its Kansas City broadband project into a business

As you likely know, Google is in the midst of providing ‘ultra high speed fiber’ access to the residents of Kansas City (MO and KS). (‘Ultra high speed‘ means at least 1gb, which is 50100x faster than your 10mgb connection.) This has been positioned as an experiment, and as a poke in the eye to the incumbents to “show ‘em how it’s done.” And it has apparently made the incumbents nervous enough to offer residents a bounty for tips about the deployment.

Now Bill St. Arnaud speculates about how Google is going to turn this into a business. I have zero idea if he’s right, simply because I don’t know enough to have an opinion, but it sure is some interesting speculation.

Bill’s post is very readable, so I suggest you not rely on my summary, but here goes. First, Bill wonders how Google could hope to make back its investment in the physical infrastructure, since providers need about 40% of the market to subscribe to drop the per-user cost sufficiently. But (Bill figures), the incumbents will never let Google take 40% of their market. So, Bill figures:

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. I would not be surprised that Google decided to offer a basic 1 Gbps service to every home. This would clearly differentiate Google from the cableco or telco and make it almost impossible for them to compete without undertaking a massive investment themselves.

But, Bill guesses that the premium services will still not make the venture profitable. So, he speculates that Google…

…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 be used to pay for the fiber or premium services, rather than being returned to the customer as piffling amount of energy savings.

So, the deal to users would be: We’ll give you incredibly high speed connectivity (or we’ll give you some great premium services) if you’ll let your energy company install a smart thermostat and manage your peak energy consumption in ways you won’t much notice. The user’s energy bills don’t go down (or don’t go down proportional to their energy consumption decrease), and the energy company shares the money with Google.

I’m not convinced that users would take the deal positioned that way. Maybe I’m positioning it wrong, but it seems like a pretty complex offer. I think I’d rather take a deal with my energy company to lower my usage and my costs, and then decide if I want to pay Google for fiber access or for premium fiber access. I already resent the cablecos for making their “triple play” (telephone, tv, Internet) pragmatically a requirement to get any one of the three. A double play of Internet and energy savings would be even weirder.

But, Bill knows approximately 50x what my own poor brain fiber does. The key is, I believe, in the energy company making the claim that the decrease in energy consumption will be minor, the noticeable impact on the user will be negligible, and the monetary savings would be “piffling.” If he’s right, it’ll be fascinating to watch.

 


This isn’t right, is it?

Seemingly wrong WolframAlpha result

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November 10, 2009

Seattle’s new mayor wants muni fiber

Mike McGinn’s campaign platform is high on the city providing an optical fiber infrastructure to the city of Seattle.

Mike McGinn’s campaign is grass-rootsy.

Mike McGinn won.

Is Seattle going to go muni-fiber?

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March 31, 2009

[f2c] Grids and muni nets

Geoff Daily introduces a panel at Freedom to Connect. [Note: Live blogging. Unedited. Uncorrected. Incomplete. Flat out wrong. Thanks for playing.]

James Salter talks about the Smart Grid. The biggest problems on earth: Over-population and global warming. The second is a subset of the first. James at first thought Al Gore was a hypocrite, but now he’s convinced of the truth of what AG says. (James is a proud Republican.) American residential electric usage has tripled in the past 50 years, and the efficiency has gone down. (Efficiency = peak usage over average usage.) 40% of carbon comes from coal-fired power plants and 33% from cars. Obama says we should get greener by building windmills, etc. But the effective thing he’s doing is installing smart meters. Smart meters are networked. There are 140M lectric meters in the use. Only 6.7M are smart meters so far. He estimates it’d cost $2,500 per house — including fiber to the house — to lower the load factor significantly.

Q: Is fiber required for a smart grid?
A: Nope. But the apps will need more bandwidth over time.

Terry Huval of Lafayette, Louisiana tells about broadbanding the city. In 1998, the Lafayette Utilities System put in fiber for its utilities. In 2000, they were authorized to “establish a wholesale and governmental retail network.” Companies were allowed to resell access to private folks. In 2004, the city proposed fiber to home and business as its fourth utility. But then the “Local Government Fair Competition Act” passed, a bill favoring the incumbents. The Governor stepped in and negotiated a compromise. Then the private telcos successfully sued. In 2005, the public voted 62% in favor of the project. “It was looked upon as a huge benefit to local businesses.” It was viewed as being like electricity. Then, in 2006, tow unknown citizens filed suit. 2007, State Supreme Court ruled 7-0 in favor of the project. The whole process cost $3.5M. In 2009, they’ve started providing retail telecommunication services to residential and smaller business customers, at 20% less than the standard competitor. But the vision is to provide much more than basic TV and phone services. They provide the triple play for $85. For $138 you get 250 channels (including HD) and 30MB up and down Internet. Customers can build their own bundle. E.g., unlimited long distance for $31. Five cents a minute to reach much of the world. He stresses that they’ve listened to the community. So, they’ provide 100Mbps for peer-to-peer, free. “We think it opens up doors for all our citizens and businesses.” They enable Net access through your TV if you don’t have a computer. It’s limited, but they can Google… People love the service overall and consider it, proudly, to be “ours.”

Q: [bob frankston] Among the triple play, which funds what?
A: TV is the driver.

Q; [Todd of the Utopia project in Utah] Will you wholesale access to the network so that others can be ISPs.
A: No. At least not until our bonds are paid off.

Q: [brett glass] Where does Lafayette get its backbone connection?
A: AT&T and Quest, about $50-60/Mbps. It’s an over-subscription-based model. You assume you won’t have all of your sources using all of your resources at the same time.

[Terry now plays Cajun fiddle and sings. Awesome.]

Geoff Daily makes a quick announcement of a new alliance: “All Americans deserve equal access to the best broadband. The best broadband is fiber.” [I couldn't get the URL. Sorry.]

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March 30, 2009

[f2c] First panel

At Freedom to Connect, the opening panel, moderated by Joanne Hovis, is on municipal wifi. [Note: Liveblogging. Missing stuff. Typing too fast. Not spellpchecking. No rereading. This is a terribly incomplete and occasionally wrong set of notes.]

Tim Nulty is the former head of Burlington Telecom, and is now the head of a consortium bringing fiber to rural Vermont. He says there are about 45 municipal wifi companies in the US. We pretty much know how to do that. It’s different in rural areas, where the average density is 13 residences per linear mile. About 60% have no broadband. Why should it be harder to replace copper wire with glass the second time around? Why is there this myth that it’s impossible? Because there are incumbents who have a financial interest in saying that it’s impossible because they don’t want to do it [because the margins are lower than they want, which would drive down their overall margins, even while increasing their revenue].

Dirk Van der Woude, program manager for broadband in Amsterdam. They provide boradband as a public service such as garbage collection.

Lev Gonick, founder of One Community, has a million institutional users, via a community network, a 501C3. It has about 4,000 route miles. The governance model is mayor-proof because the infrastructure owns the governance. The goal was not to build-up fiber optics but to enable and transform their communty.

Bill Schrier works on getting Seattle fibered. He says that they’re spending $4B on highway infrastructure, which is 8x what it would cost to bring fiber everywhere.

First Joanne question: Fiber vs. Wireless [which is the topic burning up the backchannel]. Dirk says he pays for fiber at home. Wifi works but is slow, he says. For wifi, you need access points with backhaul that is likely to be fiber.

Bill: What’s the killer app for a network? HDTV. Video teleconferencing.

Tim: Fiber is cheaper and more economic if you intend to be universal. Bringing fiber to his neck of the woods (1,000 sq miles) is $69M. Doing this through wireless, with 2.3 or 2.5gH Wimax, to get close to universality, would be $35M. It costs half as much but brings 1/4 the revenue. The capacity is 1% of what you get with fiber. The right thing economically to do is to put the Wimax on top of the fiber network, at which point it costs $10M, which makes it a great business.

Dirk: In Amsterdam, dwellings are stacked. Getting the fiber to move vertically is a problem.

Mark Cooper: Which comes first, fixed or mobile computing? For connecting the underserved, the killer app isn’t HDTV. It’s connectivity. We want wireless: 1. It gets you further. 2. Mobile computing is a twofer: Mobile computing and basic connectivity that meets the need for connectivity. 3. Mobile computing is future-proof. For this project [stimulus package?] wireless is the right thing to do. 4. Public accountability.

Tim: Rural fiber does not need public money. It can pay its own way. Rural wireless does not pay its own way.

Lev: This is a family dispute. We have a once-in-a-generation opportunity. Let’s move ahead, be pragmatic, etc…

Bill: Wireless and fiber are synergistic, (David I. asks for a show of hands; everyone agrees.)

Q: Fiber is the foundation that supports wireless. Now: Go mesh!

Tim: Mesh is great for thin uses. But for carrying lots of data, it breaks down.

Bob Frankston: We need to change the dynamic. We’re stuck in railroads where you pay for each trip. We need to get to the point where assume connectivity at any speed. The question is the funding model.

Dirk: Cooperate with anyone who wants to cooperate with you, so long as you get the network you want…

Bice Wilson: “Designing the hidden public way,” i.e., the infrastructure of connectivity. There’s a vast network of services that needs connectivity to the entire community.

Lev: That’s what One Community is about.

Bill: In Seattle, that’s where we’re directing our efforts.

Roxanne Googin: Current status…?

Tim: The really important investment is in universal fiber.

Joanne wraps up reminding us of the sense of the room that we want universal connectivity and we want it yesterday. [Gross paraphrase] [Tags: ]

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