Google could even take the Android approach -- make the technology available to municipal governments and others and watch their advertising business grow as it is deployed.
In 2012, Goldman Sachs analyst Jason Armstrong looked at Google Fiber and estimated that it would cost them $70 billion to connect less than half of all US homes. He also estimated that it had cost Verizon $15 billion to bring FIOS fiber to 17 million homes. Armstrong concluded that he was "still bullish on cable, although not blind to the risks." (Armstrong has since left Goldman Sachs and works at Comcast and Verizon has cut back on FIOS).
That sounds grim, but what if wireless technology could significantly reduce the cost of connecting homes and offices?
Google has asked the FCC for permission to conduct tests of millimeter wave-length wireless communication for 180 days.
As shown below, short wavelength, high frequency (E-band) signals travel relatively short distances and can not pass through walls or other obstructions, but they enable gigabit and faster data transmission rates:
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| E-band wireless in context: The current market is dominated by a few companies selling equipment for cell phone backhaul and other point-to-point applications, but what if the smart guys at Google could figure a way to use it for neighborhood links? (Image: E-band communications.) |
How much of Armstrong's $70 billion estimate would Google (or anyone else) save if they could run fiber to the block or neighborhood and reach individual homes using this radio technology?
Google Fiber started in Kansas City and today it is available in two other cities (and some surrounding areas). They are currently evaluating 34 additional cities and those cities would look a lot more attractive if they were able to use wireless links to reach homes from neighborhood poles. Google fiber could also provide backhaul for mobile communication.
If this dream materialized, Google would provide stiff competition to the incumbent phone and cable companies and drive connectivity prices down, but would that be the best solution for the public?
In the US, most of us have only one or perhaps two competing Internet service providers. Google would be a second or third, but we would still have an oligopoly and, while Google may not "do evil" today, who knows about the future?
Google, Comcast or any other ISP must deal with local government for things like access to tunnels, phone poles and utility boxes. Might we not be better off in the long run if local government owned the infrastructure regardless of the technology? This solution has worked well in Stockholm, Sweden, where the municpality owns the infrastructure and sells wholesale access to ISPs who service customers.
What will Google do if this technology works out? They could become nationwide wholesale or retail ISPs or even take the Android approach -- make the technology available to municipal governments and others and watch their advertising business grow as it is deployed.
All of this is highly speculative, but if the technology and business model work out, we may be able to get low-cost gigabit connectivity without moving to Kansas City.
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Update 4/16/2016
The FCC has granted Google an experimental license for terrestrial and airborne high-frequency wireless tests. The grant is effective March 17, 2016, through April 1, 2018, and covers 71-76 GHz and 81-86 GHz frequencies.
The airborne experimentation may be for Google's Project Loon and the terrestrial experimentation may be for high-speed short-range wireless link in densely populated neighborhoods (like the street where I live :-).
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