California ISP Race to Deliver Internet Benefits Us All

Google's experimentation with wireless Internet delivery is intended both as a means for the company to more cheaply reach users with its own high-speed service, as well as an incentive to its competitors to extend ultra-high-speed internet.

by Ethan Baron, The Mercury News / August 12, 2016
San Francisco Bay Area, image cropped. Flickr.Eric Fischer

(TNS) -- Google's plan to at least temporarily suspend its fiber program and experiment with high-speed wireless internet delivery in Silicon Valley is the latest sign of how the search giant is playing a key role in jump-starting cheaper, faster service around the country.

Google has done that, in part, by pushing competitors like AT&T and Comcast to move faster in boosting internet speed.

While Google may be coming out ahead in this clash of titans -- faster and more widespread internet service means more clicks on Google ads -- the clear winner is the public, as the best and most affordable internet service is delivered to more and more customers across the U.S., analysts said.

"You really have to take your hat off to them," said analyst Roger Entner of Recon Analytics. "They're doing everything really, really well. Google can gently or directly make other companies move in the direction that benefits (Google)."

In a filing last week to the Federal Communications Commission, Google revealed that the firm plans to secretly test wireless delivery of ultra-high-speed internet in San Jose, Mountain View, Palo Alto and other U.S. locations. The revelation followed news that Google's plan to roll out super-speedy fiber service in cities across the country has largely been put on hold, after it successfully pressured Comcast, AT&T and others to accelerate their own plans for lightning-fast internet.

"It's a very big deal," said Blair Levin, a senior fellow at the Brookings Institution. "From a public policy perspective, this is a great game. We're doing more on the internet and because of this we'll be able to do it better and faster and cheaper."

And that plays right into Google's advertising-based business model.

"The faster the internet connection that the customers have, the more money Google makes from selling advertising," Entner said. "So they are building these networks first with fiber to basically get everybody else moving."

In a statement, Google said it is testing "the viability of a wireless network that relies on newly available spectrum. The project is in early stages today, but we hope this technology can one day help deliver more abundant Internet access to consumers."

In its FCC filing, the company said it was keeping its workforce generally in the dark about the wireless program, with involvement only on a "need to know" basis. Third-parties working on the project have had to sign "robust" nondisclosure agreements, Google said. The firm also asked the FCC for redactions to public filings to protect information of "significant commercial value."

Google blew the starting whistle on the great internet-service race by rolling out superfast Google Fiber in Kansas City in 2012 and inviting other cities to apply for the program, Levin said. More than 1,000 cities wanted in. The move by Google shook up the telecommunications and cable companies, which had for several years been simply harvesting users rather than improving internet service, Levin said.

A year later, when Google Fiber moved into Austin, Texas, AT&T and Time Warner responded by announcing increases to internet speeds in Austin.

"In 100 percent of the cities where (Google has) announced a fiber build the telco (telecommunications company) has announced an upgrade to fiber and almost 100 percent of the cable guys have said they're going to do it as well. In this game, Google is a likely winner no matter what," Levin said.

Cable operators including Comcast have reacted to Google's moves by using new technology that allows them to boost data-transmission speeds tenfold with modifications to cable hardware and distribution of new modems to customers, Entner said.

Some analysts questioned whether Google ever wanted to get in the business of laying fiber.

"Digging up streets is definitely not Google's thing," Joel Espelien of The Diffusion Group said earlier this week. "Wireless is definitely much more kind of up their alley."

Google's experimentation with wireless internet delivery is intended both as a means for the company to more cheaply reach users with its own high-speed service, as well as an incentive to its competitors to extend ultra-high-speed internet to areas where fiber deployment is cost-prohibitive, such as rural regions, Entner said.

"They want to provoke exactly the same response so that the high-speed internet is not just in the big cities but everywhere," Entner said. "For Google, it doesn't matter who provides the fast service."

But purely in terms of internet speed, wireless remains inferior to fiber, Entner said. "One strand of fiber has more capacity than the entire wireless spectrum," he said.

The three Silicon Valley cities were chosen for wireless testing because those sites will allow Google to use its own employees for the experiments and more effectively manage the tests, Entner believes.

Google, said Levin, has been the "single most important force" in improving internet speed, access and price for Americans.

©2016 the San Jose Mercury News (San Jose, Calif.) Distributed by Tribune Content Agency, LLC.

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