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Google Fiber Cutting Jobs and Halting Rollout

nytimes.com

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Re: Google Fiber Cutting Jobs and Halting Rollout

#311

Post by dahdum »

fragmede wrote: post #129
daveFNbuck wrote: post #88

Earlier quoted context omitted.

I live in the San Francisco Bay Area, which is a bit smaller and more densely populated than New Jersey. Yet I have an unreliable and expensive 20mbps connection. If this issue were about size, Silicon Valley would have world-class high speed internet.

Silicon Valley has 100 or 200 Mbit Internet options available, and for the lucky, gigabit Internet. Funny thing is, like money in the Valley, it's very unevenly distributed. (I pay ~$50/month for 100Mbit) Silicon Valley covers a large number of municipalities, and without specifying which one you're in, all I can say sorry, 20 Mbit is slow these days.

Sunnyvale here, it's Comcast (now including data caps!) or DSL.

Re: Google Fiber Cutting Jobs and Halting Rollout

#312

Post by candiodari »

exelius wrote: post #42
kyrra wrote: post #21

Earlier quoted context omitted.

What fate would that be? Fiber isn't going away, they have just stopped expansion. There are also hints about investing in other tech instead of laying new fiber across an entire city (WebPass as the article mentions). I agree that Fiber isn't Google business, which is why Alphabet was created. It allows for the company to try expanding into areas that aren't just software. Also, Google does a LOT of infrastructure w…

Fiber's operations and infrastructure will be sold to one of the major telecoms within the year (just like Google did with Motorola once it ceased to be useful). My money is on CenturyLink since Google's approach meshes well with their overbuilding strategy and footprint. It's a 0-5% margin business for the foreseeable future; and best-case scaled scenarios it's a 10% margin business with huge capex. Google shouldn't…

> It's a 0-5% margin business for the foreseeable future; and best-case scaled scenarios it's a 10% margin business with huge capex. Google shouldn't be interested in anything with less than a 20% margin at scale. So from a portfolio standpoint, it was a stupid bet.

I know that's standard financial thinking, because a business is assumed to be able to absorb pretty much any amount of capital and invest it at a rate of it's core rate, which for Google is indeed 20%. However, obviously, Google cannot do that. It can invest maybe 10-15 billion, but no more (presumably unless you want to make Google a low-margin business). So that doesn't appear to be true.

Is it better for Google to "invest" their 80 billion or so at 3% in liquid assets versus investing it in a 10% margin business ? Here's the thing: they'll make more profit with the money in Fiber than they'll make with the money in bonds and stocks. Definitely. If fiber provides a 10% return on investment, definitely.

Sadly I know: for the GOOG and GOOGL stock prices, yes it is a better idea to keep cash on the sidelines, as then you get the benefit of investors assuming Google can deploy cash at 20%, despite it being obviously wrong. But it offends my sense of efficiency.

Re: Google Fiber Cutting Jobs and Halting Rollout

#313

Post by synthetik »

SEJeff wrote: post #13

Well google announced they were exploring a fiber rollout in Chicago. Now both AT&T along with Time Warner Cable have 1G service throughout parts of the city. Alternatively, one can look at this not as a failure, but as a success. The point of Google fiber was to force carriers to get faster internet to everyone. It appears that it has been working. This benefits google directly as their properties such as Youtube ca…

I've been trying to get Time Warner Cable for 7 years now. The fiber runs on my street, but they refuse to connect my house and won't give a real reason why. Living in the middle of San Antonio, TX, I rely on tethering and the hope that T-Mobile doesn't terminate my line for going 20 times over the 10 GB limit. While the Fiber influence is nice, it's not doing a vast amount for last mile access.

Re: Google Fiber Cutting Jobs and Halting Rollout

#314

Post by rayiner »

ajford wrote: post #301
gopalv wrote: post #254

Earlier quoted context omitted.

> The suburban house people complain that it costs them 1-2k Euro to pay for the fibre, but they pay for it. I think that's the difference - the costs are upfront, not paid by capital/loan with the subscriber having to pay for it eventually. Rationally, most people wouldn't want to pay that much into a US cable/net provider, considering their historical experience with them.

I would totally pay 1-2k upfront (assuming I owned the home or was planing to stay at least 5 years) if I "owned" the fiber and could choose my own ISP. At that level of competition, it could easily drive the prices down into the $10-20 range for high bandwidth, which would probably break even with current cable internet prices now. I pay nearly $100/mo for 300Mbps/20Mbps since I have about 9 active users in my home.…

Most of the monthly fee you pay does not go into paying off the initial investment. For example, Verizon wireline's EBITDA margin is 25%. So out of your $100 bill, $75 goes to maintenance, customer service, etc. and $25 is left before paying interest in debt used to build the network, paying taxes, or accounting for the depreciating value of equipment marching toward obsolescence.

Re: Google Fiber Cutting Jobs and Halting Rollout

#315

Post by WillPostForFood »

amazon2 wrote: post #275
neuromancer2701 wrote: post #222

Earlier quoted context omitted.

Isn't people/mile still incorrect because you basically have islands of large dense cities with roads between them that nobody lives on.

People still live in the countryside. Rural areas aren't some uninhabited wilderness. If your aim is to provide broadband to all, you'll have to build there too. Sweden aims to do 100 Mbps to 90% of the population by 2020. Can't do that by just covering urban areas.

Apparently you can get to 86% by just covering urban areas.

http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS

Re: Google Fiber Cutting Jobs and Halting Rollout

#316

Post by rayiner »

sunflowerfly wrote: post #306
gopalv wrote: post #254

Earlier quoted context omitted.

> The suburban house people complain that it costs them 1-2k Euro to pay for the fibre, but they pay for it. I think that's the difference - the costs are upfront, not paid by capital/loan with the subscriber having to pay for it eventually. Rationally, most people wouldn't want to pay that much into a US cable/net provider, considering their historical experience with them.

In the US we typically capitalize utility projects over long time periods, e.g. 30 years. When you pay your water bill the loan is added into the base payment before usage. We built electricity to virtually every home in the US, we could build fiber too.

It's notable that the phone network was built by a government sanctioned monopoly that was permitted to be quite profitable for most of its existence. Pull AT&T annual reports from the 1950s and 1960s and compare them to the financials of Verizon's wireline division today.

Re: Google Fiber Cutting Jobs and Halting Rollout

#317

Post by austinhulak »

dboreham wrote: post #43
gm-conspiracy wrote: post #23

Anybody know what is going on here? This seems like a page out of Verizon's FIOS rollout. Is Google working on their own cellular network (non-MVNO)? Is this due to the FCC reclassification of internet as a common carrier?

It's due to the fact that building a decent network for residential customers at scale is very expensive and not that profitable unless you have a long-term monopoly.

Ding ding ding! This is exactly it. As a Google Fiber customer in Austin, it honestly wasn't any better than any of the other ISPs. Ironically, the only thing that was better was the DVR and live TV search that came with the TV service.

Re: Google Fiber Cutting Jobs and Halting Rollout

#318

Post by rayiner »

kmicklas wrote: post #302
rayiner wrote: post #204

Earlier quoted context omitted.

The "NYC" urban area encompasses NYC + Westchester + Long Island + Newark + parts of CT. Half of the population that lives/works in/around New York lives outside of the city proper.

Okay but then you can't compare that to Stockholm proper. It should be exceedingly obvious to anyone who has even Google image searched the two cities that NYC is much denser.

I didn't compare it to Stockholm proper. I compared the NYC urban area (basically, NYC and it's suburbs and satellite cities) to Stockholm's urban area. Stockholm proper is less dense than NYC proper, but that is by itself not that useful a number. More people live outside NYC in the urban area as live inside NYC. The opposite is true for Stockholm.

Re: Google Fiber Cutting Jobs and Halting Rollout

#319

Post by rayvd »

nickik wrote: post #107
markbnj wrote: post #58

Earlier quoted context omitted.

When you say "citizens of the US" you're talking about a continent that would take roughly five days to cross at highway speed, driving ten hours a day. You may as well say "citizens of Europe." If you haven't done that drive, by the way, you should. It will add some perspective to these comparisons. A more reasonable comparison would be between Sweden (population 9.5m) and the state I live in, New Jersey (population…

Maybe you are a troll, or maybe you just don't understand how networks work. The relevant factor is not the overall size, but rather the population density. Lower population density means more cable per person (on avg.), so it makes it MORE expensive. Sweden is not very dense, large parts are uninhabited forests. Sweden 24 United States 35 New Jersey 467.2 You are basically saying, "I live in the most densely populat…

Based on the writing style, it would seem you're the troll.

Re: Google Fiber Cutting Jobs and Halting Rollout

#320

Post by harpiaharpyja »

jules wrote: post #205
weberc2 wrote: post #170

Earlier quoted context omitted.

> Sweden simply does better, despite having to deploy more infrastructure to provide service. While this is probably true in an absolute sense, Sweden is also a much smaller, more homogeneous country than the U.S.; I don't think governments scale very well, so a small affluent country can likely be more nimble and innovative than a large affluent country (think startups vs enterprises).

I've seen this said many times, but I've never understood why people think this argument makes sense. If anything it's the opposite: the larger the country the larger the economies of scale. If there are diseconomies of scale then you can organise it at the state level or municipal level. Being a larger country simply gives you the option to organise it at a larger scale.

> Being a larger country simply gives you the option to organise it at a larger scale.

The argument that it is merely an option assumes that you are able to rationally choose the best option from the ones available. Not the case when we're talking about government. And the larger the government, the more political power is at stake, the less rational the decision making becomes.

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