Forgot your password?
typodupeerror
Businesses Google Networking The Almighty Buck The Internet News

Nationwide Google Fiber Deployment Would Cost $140 Billion 327

Posted by Soulskill
from the or-a-dozen-aircraft-carriers dept.
An anonymous reader writes "For a lot of U.S. internet users, Google Fiber sounds too good to be true — 1Gbps speeds for prices similar to much slower plans from current providers. Google is testing the service now in Kansas City, but what would it take for them to roll it out to the rest of the country? Well, according to a new report from Goldman Sachs, the price tag would be over $140 billion. Not even Google has that kind of cash laying around. From the report: '... if Google devoted 25% of its $4.5bn annual capex to this project, it could equip 830K homes per year, or 0.7% of US households. As such, even a 50mn household build out, which would represent less than half of all U.S. homes, could cost as much as $70bn. We note that Jason Armstrong estimates Verizon has spent roughly $15bn to date building out its FiOS fiber network covering an area of approximately 17mn homes.' Meanwhile, ISPs like Time Warner aren't sure the demand exists for 1Gbps internet, so it's unlikely they'll leap to invest in their own build-out."
This discussion has been archived. No new comments can be posted.

Nationwide Google Fiber Deployment Would Cost $140 Billion

Comments Filter:
  • by symbolset (646467) * on Saturday December 08, 2012 @03:41PM (#42227041) Journal

    I guess it's time for all of us to tell our power utility that fiber is essential infrastructure. They need to standardize on the Google Method and wire our streets so that they're ready when Google comes here. Otherwise this is going to take too long.

    First communities to make it a downhill run for Google win the digital economy.

    Almost the whole world wants Google fiber.

    And if they won't do it - maybe they'll show us how we can do it for ourselves.

    • Re: (Score:2, Informative)

      by alen (225700)

      sorry, verizon is way ahead of google

      and the only way google did it in kansas city was by paying off local officials to allow them to put their fiber on the poles at lower rates than everyone else's lines. not going to work everywhere. ISP's and others are already suing kansas city for allowing this

      • by s73v3r (963317)

        Those assholes had plenty of time to try and do the same thing. I have no sympathy for them that someone got a better deal.

      • by perpenso (1613749) on Saturday December 08, 2012 @03:58PM (#42227209)

        the only way google did it in kansas city was by paying off local officials to allow them to put their fiber on the poles at lower rates than everyone else's lines. not going to work everywhere. ISP's and others are already suing kansas city for allowing this

        Giving local officials some sort of deal seems to be a well established practice that has worked in many locales. See the cell phone industry. A cellular tower is opposed until the provider offers to put equipment to support local police and fire communications up there. I suspect that the initial opposition is just a gambit to get such freebies in some locales. I'd be surprised if such practices have not already been ruled on by the courts.

      • by symbolset (646467) * on Saturday December 08, 2012 @04:00PM (#42227219) Journal

        Property values are up. Jobs are up. KC is in the national spotlight in a good way. Every local official that got behind this is a local hero who just amplified his political opportunities. Those folks are assured reelection in perpetuity. They didn't have to be bribed to let Google hang fiber: they had to beg Google [wikipedia.org] to come hang the fiber. They were changing the honorary name of the city to "Google". They were promising the name of every first-born son...

        Seeing how this is working out, Google won't lack for cities to beg them to come hang fiber for quite some time.

        Over 1,000 cities competed for the opportunity to be first. And over 1,000 cities were disappointed to lose the chance.

        • by neokushan (932374) on Saturday December 08, 2012 @05:04PM (#42227785)

          This is the part that I'm pretty sure Goldman Sachs hasn't accounted for. That whole "could cost up to $140Bn" thing sounds very inflated.

          Look at it this way. According to them, if Google spends 1/4 of its $4.5Bn it could equip 0.83million homes. That's $1.125Bn for 0.83million homes.
          On the other hand, Verizon has spent $15bn and equipped 17million homes. For google to pass 17million homes, using the above calculations, it would cost them $25bn. Those numbers don't make a lot of sense to me.

          Now factor in the above - that cities are clamouring for Google to come there and are willing to give them as much help, tax breaks and discounts as possible to encourage it and that $140Bn could potentially halve, or at the very least drop by 1/3. Still expensive for Google to network the entire country, but they only have to hit a small portion of it before the other cable companies feel the pressure and start rolling out their own fibre.

      • Paying them off? They didn't need to write checks, they got concessions because it was obvious that there was a case for public-benefit there. They were offering literally free broadband. If anyone else was willing to pony up those sorts of concessions, they could get the same deals.

    • No. I don't need that for now. In any case I would start with densely populated areas
    • by TigerTime (626140)

      With the need for the Federal Government to "Save our Economy" the last 5 years, I wish they had decided to put that money toward replacing the entire copper phone system with Fiber Optic. It would have produced thousands upon thousands of jobs of long lasting jobs and left us with a country that is much more prepared to move forward in this century. Instead with threw away hundreds of billions of $$$ on stupid projects that no long lasting benefit.

      Depressions/Recessions are the PERFECT time to handle issue

    • by MrDoh! (71235)
      The '140 billion' value is coming from Goldman Sachs remember, a company that invested in companies deploying fiber years ago to prep for this moment, could it be that they're highballing the figure to get a better valuation for their money? If it's that much, Google will deploy it themselves by buying the company that makes the fiber, installs it, creates the routers (oh... Moto Mobility...), and generally run everything at breakeven/loss to make the cash at the point it wants to. 140 billion isn't the a
    • ALSO!

      Do the math and it looks awesome.

      $180BN / 300M (cost/population) -- and you're looking at about $466/person. Break that down and its basically a year of High Speed internet service that most people pay about 40-50 bux for each month.

      For the cost of the SERVICE for one year, the infrastructure can be brought up over 100 fold. THIS IS WORTH DOING.

      A few years ago AT&T said (contradicting other PR claims) that they could double bandwidth at a cost of $6/user. What we are seeing is that capitalism

      • by Enderandrew (866215) <enderandrew AT gmail DOT com> on Saturday December 08, 2012 @06:22PM (#42228391) Homepage Journal

        Google was charging $300 per house for the installation, or waiving that if you pay for a two-year contract.

        It does cost Google a lot to build out the infrastructure, but they'll pass some of that cost on to consumers to make it viable.

  • by ShanghaiBill (739463) on Saturday December 08, 2012 @03:45PM (#42227087)

    In a country of 300M people, $140B is only $50 per person. Comparing the price to Google's market cap is silly. For a big infrastructure project like this they would, of course, seek new capital to cover the cost. This is affordable.

    • by kramulous (977841) on Saturday December 08, 2012 @03:52PM (#42227149)

      It is more like $500. Still ridiculously cheap.

      Only governments can do this sort of thing properly. Pity Americans don't trust their government.

      • by Nerdfest (867930)

        I don't care who does it as long as it remains open/free.

      • by Anonymous Coward
        Have you seen what the government spends on stuff? By the time the government was done, we'd be lucky to get it for $5,000 per person.
      • by amiga3D (567632)

        Have you ever watched Congress on C-span? If you did you would understand.

      • by NFN_NLN (633283) on Saturday December 08, 2012 @04:21PM (#42227443)

        It is more like $500. Still ridiculously cheap.

        Only governments can do this sort of thing properly. Pity Americans don't trust their government.

        1Gbps fiber to the house is a waste when you consider the options:

        For $140B we could exactly bail out the banks after screwing us yet again.
        We could extend the war in Afghanistan another 3 years.
        Or you could also extend the "war on drugs" another 4 years!

      • by cdrguru (88047) on Saturday December 08, 2012 @04:33PM (#42227531) Homepage

        Americans keep getting slapped in the face with proof after proof that their government cannot be trusted with simple things, like taking out the garbage. Why would be be foolish enough to trust the government with (a) something worth lots of money - that could be stolen or corrupted and (b) something really complicated?

        Most likely, a government "Internet for the people" project would be decided that it simultaneously could not present information about gay sex activities and be required to present information about gay sex activities. Obviously when something is both mandatory and prohibited this schizophrenia will seep into everything. If you could get a road map, it would have to be in the public domain from 1925 or earlier. If it were possible to display information about religious events, it would do so only for an obscure sect of aboriginal head hunters that worship the two dollar bills they found in 1880 - only this would pass the censorship filters. Of course it would have to be both government funded and ad supported with an annual lottery to determine what company was to receive the hundreds of billions in ad revenue. Of course when the only winner every year was found to be owned by the Speaker of the House or the Senate Majority Leader hearings would be held and the same company selected the following year.

        Trust us, no American with any sense wants the government involved in delivery of Internet services in any way, shape or form.

        • That is because their government is so bad.
        • by mellon (7048) on Saturday December 08, 2012 @05:20PM (#42227911) Homepage

          Then why have the telcos and cable companies spent so much money preventing it from happening? To get it outlawed in every major market? If it's impossible for government to do it, then surely all of that lobbying and all those laws were an unnecessary waste of time.

          No, in reality, it's better to lay fiber once to every house and then sell transit on the fiber to ISPs. That's something that a city government can do quite effectively. The reason it hasn't been done is that it would create competition, and ISPs don't want competition. They want to own the market. In my town it's Comcast or nothing. Nothing personal against Comcast, but I'm paying a lot for fairly crappy connectivity. If I had a choice, I'd take it.

      • Re: (Score:3, Insightful)

        by Kral_Blbec (1201285)
        No, no, no. It's more like $5000 for me, and my unemployed neighbor gets a $500 check.
      • by mysidia (191772)

        It is more like $500. Still ridiculously cheap.

        They could ask the households to cover the cost. To signup for the service, and have fiber built to you, you agree to sign a contract to pay $500, which you can finance over 2 years at 10% interest; coming to $25 a month for 2 years, then free for life.

        Possibly a $2 to $5 / month optional insurance charge to cover any damage caused by backhoes or other disasters. And a $1/month port fee to keep the fiber lit.

        Considering the average price of D

        • by symbolset (646467) *
          They actually do this. Pay $25 a month for the first year or $300 once, and you get fiber to the home and 5Mbps service for free for six years. Retain the option to step up to gigabit later.
        • by schnell (163007)

          then free for life

          It's a good thing then that Internet bandwidth is all free and doesn't actually cost anything. Or infrastructure upgrades. Or tech support. Or spares and maintenance. Or customer service. Or... you know, all the things that make Internet service cost money.

          Seriously, where do people get these ideas about what things should cost? Just because your Gmail is paid for by advertisers (it's not free!) you think that if Google is involved it somehow just magically becomes free to provide services?

          • by mysidia (191772)

            It's a good thing then that Internet bandwidth is all free and doesn't actually cost anything.

            I said fiber free for life; free interconnection to a local Transport fabric. Not internet bandwidth

            Or infrastructure upgrades. Or tech support. Or spares and maintenance.

            When was the last time you needed tech support on your water lines, sewage lines, or electricity lines? Not the transport provider's responsibility. If your fiber breaks, or stops passing light, then that falls under repair costs, t

      • by anagama (611277)

        Why trust the government? Our government sucks. It has no qualms about burning up 1.4 trillion making enemies around the world in favor of certain moneyed interests, but can't be bothered to do something actually useful for a fraction of the cost.

        http://costofwar.com/ [costofwar.com]

      • Only governments can do this sort of thing properly. Pity Americans don't trust their government.

        Pity the governement is flat broke and in debt up to its ears. Look to Korea for how to do this right.

    • by alen (225700)

      which is why internet is expensive

      people hype how cheap google fiber is but the point is if you're like verizon or Comcast and have to borrow money and pay 5% - 8% or so PER YEAR interest on the debt your service is going to be more expensive

      $140 billion at 5% a year almost $8 billion a year in interest costs. and then you have to make enough profit to pay back the bonds after they mature. internet service has this bad trend of always dropping in price

      • by symbolset (646467) *

        The rate they're charging for TV is $140 per month, or $1600 a year. If it costs $500 each, I think you can see where the first few pay for the next few and so on. Google knows about ramping scale. If they pay $1B to do 2,000,000 homes the first quarter, the second quarter those homes pay for the next 2,000,000 homes. The third quarter those 4,000,000 homes pay for the next 4,000,000. The second year those 8,000,000 homes become 64,000,000 homes without any further investment. Year three they wire the

        • by alen (225700)

          the $140 for TV is only because of the sweet deal in KC which was a tiny deployment

          borrowing money and paying all other other costs of running the service it will be just as expensive as Time Warner or Verizon

          the equipment they give the customers is worth $500 or so. figure $30 a month paid out to the content owners for licensing. lots of other costs

    • In a country of 300M people, $140B is only $50 per person. Comparing the price to Google's market cap is silly. For a big infrastructure project like this they would, of course, seek new capital to cover the cost. This is affordable.

      I think this can't be stressed enough.

      If the numbers in this report are anywhere near accurate, it ought to be easily possible to get a national fiber network. (Financially possible; saying nothing about politically here.)

      Furthermore, it highlights just how dishonest and greedy Verizon is being in their decision to stop rolling out fiber. The primary reason they are doing it is to push more people onto 4G wireless—which they can charge much more for, and which is much less regulated than any wireline

      • Furthermore, it highlights just how dishonest and greedy Verizon is being in their decision to stop rolling out fiber. The primary reason they are doing it is to push more people onto 4G wireless—

        I don't think that's the case. I'm loathe to defend Verizon, but from what I understand they stopped rollout because they had this amazing fiber network with no subscribers (relatively speaking), and they were getting low on cash. They even sold part of the fiber network to Frontier. Also, Verizon Wireless is not the same company as Verizon Telecom. VWZ is a company which is owned 50/50 (roughly, I think) between Verizon Telecom and Vodafone.

        • by mellon (7048)

          It's worth noting that with the FiOS bandwidth caps and the high speed of the service, you could blow through your entire month's allotment in about an hour. It's not deeply surprising to me that this didn't turn out to be popular.

    • $140,000,000,000 / 300,000,000 people = $467/person. But if you go by households you're going to have to pay at least $1,000 each.

    • by godrik (1287354)

      as said before it is more $1000 per household, still cheap. The main question is how to operate and upkeep that network, how much will that cost be? Also Who will control the network. Somewhat having 100% of the network infrastructure controlled by google does not sounds like a good thing.

  • Apple's got the cash. What would it take for them to get in on the game?
  • Well, according to a new report from Goldman Sachs, the price tag would be over $140 billion. Not even Google has that kind of cash laying around.

    Apple could, they have $120 billion in cash. Maybe that is what they are saving up for ... becoming a national ISP. :-)

  • by Red_Chaos1 (95148) on Saturday December 08, 2012 @03:54PM (#42227173)

    ..."Meanwhile, ISPs like Time Warner aren't sure the demand exists for 1Gbps internet,"

    At current costs? Of course not. People would *love* to have more speed. But not if it's going to cost $100+ a month to get it like TWC/Cox/Comcast/etc. would charge for it. They create their own stagnation with greed.

    • Re: (Score:3, Insightful)

      by Anonymous Coward

      It costs 110 dollars / month now for 5Mb download 839k upload on time warner. It would cost $1000+ per month at their current pricing scam er scheme.

    • When has Time Warner ever been correct about something relating to the Internet?

      Seriously...I can't think of one time.

    • by symbolset (646467) * on Saturday December 08, 2012 @04:23PM (#42227461) Journal

      Incumbent internet providers are still trying to sell us the notion that bandwidth is a precious resource that has to be metered and capped per user, or the greedy few will saturate their networks depriving the rest of us of our Netflix. Google's gigabit fiber is not filtered, metered or capped in any way.

      This "precious bandwidth" story is either true or it's a lie. It's better for them if it's a lie.

      If it's a lie: they can open up the pipes to the max and let everybody use what they will. This will help a little to fend off the Google invasion.

      If it's true: they're hosed because Google will install more end-user bandwidth in Kansas City in the next six months than they have in their entire nationwide networks combined.

    • by mosb1000 (710161)

      I paid that much for FIOS, and I was very happy with it.

  • But Goldman Sachs sure as hell does. Let's make them cough up some of that bailout money for something useful for a change.

  • by LinuxInDallas (73952) on Saturday December 08, 2012 @03:58PM (#42227213)

    The only way to understand the true value of that kind of speed is to use my preferred bandwidth measure: Nipples Per Second.

  • by periol (767926) on Saturday December 08, 2012 @04:00PM (#42227227) Homepage
    So we can bailout Wall St. and the banks to the tune of hundreds of billions, but we can't afford to invest in infrastructure. Good to know.
    • by martin (1336)

      +1 to that exactly what i was thinking. Same for many countries

    • That was imaginary money. It was just numbers moving around in computers. If you're talking about building infrastructure, you're talking about expending man-hours and equipment, that's real money.

      • by periol (767926)
        All our money is imaginary. It's all numbers moving around in computers. The difference here is that the money spent on rolling out fiber infrastructure wouldn't end up in the hands of the the 1%. Some of it would, but not enough.
    • by tukang (1209392)
      The bailouts were loans that were repaid with interest the bailouts were not expenditures. I remember when the bailout first passed people kept on listing the different things the funds could buy i.e. # of schools, # of people fed, etc. but that shows a fundamental misunderstanding of the difference between lending someone money and giving it to them.
      • by periol (767926)
        perhaps you weren't following what actually happened with TARP very closely. this [yahoo.com] is only where things are now. suffice to say it won't get better, and will probably end up costing much more than $140 billion.
  • by Rinisari (521266) on Saturday December 08, 2012 @04:07PM (#42227311) Homepage Journal

    $140 billion is 66 weeks in Afghanistan, according to costofwar.com.

    rate = 3.51199622774 #per ms
    fiber = 140000000000
    day = rate * 1000 * 60 * 60 * 24
    fiber / day
      => 461.3815805300829
    week = 7 * day
    fiber / week
      => 65.91165436144041

  • A mere fraction of the annual defense budget :(
  • by portwojc (201398) on Saturday December 08, 2012 @04:08PM (#42227335) Homepage

    "ISPs like Time Warner aren't sure the demand exists for 1Gbps internet, so it's unlikely they'll leap to invest in their own build-out."

    The (the big players) will however leap to the effort to squelch it. If Google wants to make this happen which would change the landscape they are going to just have to do it and drag everyone kicking and screaming. As well as give their lawyers something to do.

  • by Nyder (754090) on Saturday December 08, 2012 @04:17PM (#42227397) Journal

    The Telcos need to get building what they promised.

    • by schnell (163007)

      We paid for the fiber to homes back in the 90's

      I've seen this referenced a few times on Slashdot but I have never seen an explanation of specifically how fiber was paid for and promised but never delivered. Do you have any links to good reviews of what this was and how it happened?

  • The cost to the United States of the Afghan and Iraq wars in 2011 was $160 billion. A further $120 billion will be incurred this year.

  • by Todd Knarr (15451) on Saturday December 08, 2012 @04:18PM (#42227417) Homepage

    For myself, I'd be happy with a solid 20 megabit connection. What I really want is:

    • 20 megabits upstream as well as downstream, so things like VoIP don't choke on multiple users and I can upload files to an external server without causing congestion.
    • A connection that stays 20 megabits instead of getting choked down to a fraction of that when a bunch of neighbors start using their connections heavily.

    Which means gigabit or better to the local distribution point, and neighborhood infrastructure that can handle the aggregate bandwidth. Most of the problems I have aren't my individual connection's bandwidth, it's the shared local infrastructure between my home's connection point and the ISP that's insufficient for the bandwidth of all the connected subscribers. Fix that and give me symmetric bandwidth and I'll be a happy camper.

    • by jo_ham (604554)

      For myself, I'd be happy with a solid 20 megabit connection. What I really want is:

      • 20 megabits upstream as well as downstream, so things like VoIP don't choke on multiple users and I can upload files to an external server without causing congestion.
      • A connection that stays 20 megabits instead of getting choked down to a fraction of that when a bunch of neighbors start using their connections heavily.

      Which means gigabit or better to the local distribution point, and neighborhood infrastructure that can handle the aggregate bandwidth. Most of the problems I have aren't my individual connection's bandwidth, it's the shared local infrastructure between my home's connection point and the ISP that's insufficient for the bandwidth of all the connected subscribers. Fix that and give me symmetric bandwidth and I'll be a happy camper.

      Virgin started to realise (listened?) that their customers increasingly wanted this and the upstream has been steadily getting better here. A year or so ago they bumped everyone up on the upstream for free, and they consolidated their plans a little recently.

      It's far from symmetrical (you can pay them for symmetrical 200/200, but be prepared to fork out), but the basic plans are pretty good now - 20/1, 60/3, 100/5 with no caps (just throttling on upstream if you exceed thresholds at peak times like the even

  • All it'll do is cause you to hit your download cap in an hour or two.

  • I certainly wouldn't pay extra for it nor would anyone I know. I'd much rather pay less for the 1.5Mb I'm getting. If I had more money I'd pay a little more than I am now for 10Mb but I have no use for anything faster.

    • by symbolset (646467) *
      Since it costs less than many of us are paying for cable Internet or cable and Internet, the additional cost problem isn't an issue.
  • by macemoneta (154740) on Saturday December 08, 2012 @04:56PM (#42227729) Homepage

    At $1000 per installation, they would get about $120B for 120M households; close enough to start. I would gladly pay a $1000 start-up fee for symmetrical 1Gbps/service. From other reports, Google is charging $70/month, with an operating cost of $5/month. As the early adopters start to accumulate, the revenue stream will offset the cost for the periodically lowered installation charge to increase penetration.

    Establish a nation-wide signup. Require a credit card (Google Wallet) for signup; they won't be charged, but they'll separate the wheat from the chaff. Crunch the data to find the highest population density signups and start build-out in those areas. Provide near-realtime online updates on build-out area priority. This lets those interested in an area act as promoters / ambassadors to increase signups, and raise their area's priority. Like the first cities selected, let people compete - providing free word of mouth advertising in the process.

    And don't forget the other side of the equation; offer servers reasonably priced 100Gb local Google data center / site interconnects to keep the on-net customers interested and happy.

  • by rabtech (223758) on Saturday December 08, 2012 @05:23PM (#42227939) Homepage

    The telcos are slowly strangling the internet... from bandwidth caps, to non-compete agreements with the cable companies, from AUPs that prohibit servers, blocked ports/protocols, to a complete refusal to roll out fiber even in dense urban areas.

    Google, Apple, Microsoft, Amazon, Netflix, etc should each pony up some cash and begin a nationwide deployment right now. Not with an eye toward making a huge profit, but to ensure they continue to have access to their customers without toll-booths being setup inbetween because you can rest-assured that is exactly where the Telco/CableCo dualopoly is moving us.

    This is a matter of long-term survival and they need to act now.

    Same reason they should be buying their own media companies, before Big Content buys enough of Congress to make YouTube illegal and slaps a 100% tax on all flash memory.

    The RIAA, MPAA, Telcos, and CableCos aren't necessary. It's time to eliminate them but the window on that is closing - soon they'll have too much influence to be assailable and we'll be in the Gilded Age 2.0, stuck for years until a massive depression finally loosens their grip on power.

  • by Animats (122034) on Saturday December 08, 2012 @05:31PM (#42227999) Homepage

    Gigabit fiber to the home is quietly being deployed by Sonic.net [pressdemocrat.com] in Sebastpol, CA. It costs them about $1500 per drop, but they gain back the $20 per month they were previously paying to AT&T for access to copper. Customers pay $70/month for 1Gb/s Internet connections. 20Mb/s for $40. Sonic makes money on this, and is slowly expanding the service.

    The big players in cable hate Sonic, one of the last of the independent ISPs. Network neutral, EFF-endorsed privacy policies, no caching or "deep packet inspection". Just bits.

    Sonic isn't in the TV business. (They do resell DirecTV if you want that, but that comes in via a dish, not the Internet connection.) So they don't have any bias towards sending their own content.

  • Why so much? (Score:5, Interesting)

    by guruevi (827432) <evi @ s m o k i n g c u be.be> on Saturday December 08, 2012 @05:39PM (#42228035) Homepage

    Countries like Sweden have been doing it for years at a much lower rate and they are way less populated than the US.

    How did we get phones and cable practically nationwide? How did we get electricity and water and sewage nationwide? Those are much more expensive investments than just blowing a fiber through a pipe. And fiber is already nationwide, there are fibers crossing the country in multiple directions, heck most phone companies have fiber in each street already.

    It doesn't mean you have to have fiber to every house. The existing copper will do just fine for the last couple of miles, you can get gigabit speeds on it already, the companies simply don't want to invest in the uplink and rather hoard the profits as they have been doing over the last couple of decades.

Whoever dies with the most toys wins.

Working...