Google plans to build high-speed broadband service
In an ambitious bid to revolutionize how consumers use the Internet, technology giant Google Inc. says it will build a network that would be 100 times faster than what is available for many users today.
Entering territory tightly controlled by telecommunications carriers, Google announced Wednesday that it would build and test an experimental high-speed fiber optic network that could be available in several communities and reach as many as 500,000 people. The service could be available as early as next year, an analyst said.
Consumers in those communities will be able to sign up for the service, which would offer connection speeds of 1 gigabit per second, the company said. Many high-speed home Internet connections operate at less than 10 megabits per second.
The possibility of becoming Google’s test case immediately set off a flurry of interest among consumers and businesses frustrated with the high cost and low speed of Internet access. West Sacramento, Houston and Portland, Ore., among other cities, have already set up “Bring Google Fiber” groups on Facebook.
“We would absolutely be interested in participating,” said Kevin Tonoian, city technology services manager for Santa Clarita.
Google, which considers broadband access a linchpin to extending its Internet empire, has been pushing for the U.S. to catch up with Asia and Europe in the availability and speed of broadband Internet, calling broadband the “dial tone of the 21st century.”
Google has argued that building a national broadband infrastructure is today’s equivalent to building the nation’s highway system, and would create jobs and stimulate economic development.
Faster and more widely available Internet access would also help Google get its products in front of more consumers and encourage new Internet uses such as viewing high-definition video or medical records.
“Google is trying to create a broadband utopia,” Forrester Research analyst Doug Williams said. “It wants to show regulators, government officials and other service providers what’s possible if you follow this model.”
Analysts say Google is using its political clout and deep pockets to show regulators and lawmakers the promise of speed and access in an industry historically in the tight grip of telecommunications carriers.
Google, which operates the world’s most popular search engine, has grown into a technology powerhouse with tentacles that spread into a wide variety of devices and services. But it has no plans to invest tens of billions into rolling out a nationwide network, the company said.
Instead, Google is hoping that its experimental network would prod cable and phone companies to offer cheaper, speedier access on a broader scale, said Mike Jude, an analyst at research firm Frost & Sullivan.
Google would not say how much it would spend on the project, but Broadpoint AmTech analyst Ben Schachter estimated that it could cost anywhere from $60 million to $1.6 billion, which would put only a slight dent in Google’s cash reserves of about $25 billion. Google plans to pay for the network without government subsidies.
“We are putting our money where our mouth is,” Google product manager Minnie Ingersoll said.
Google has urged the Federal Communications Commission to encourage such experiments. FCC Chairman Julius Genachowski applauded Google on Wednesday. “Big broadband creates big opportunities,” he said in a statement.
The FCC set up a task force to propose a national broadband plan that is due next month. The task force has estimated that it could cost as much as $350 billion to upgrade networks. The plan is expected to call for releasing more wireless spectrum for broadband use.
Google has a track record of flexing its muscle to overturn obstacles to open, unfettered Internet access. In 2008, Google bid more than $4 billion in a government auction for wireless spectrum. More recently it has lobbied in Washington for so-called net neutrality and for greater availability of wireless spectrum.
Google is making big moves elsewhere in the telecommunications industry. Last month, it debuted a touch-screen mobile phone called Nexus One and opened an online store to sell it. In 2008, Google invested in Clearwire, which provides Internet access using a technology called WiMax.
The National Cable & Telecommunications Assn. said Wednesday that it would “look forward to learning more” about Google’s test program. The trade group, whose members include Time Warner Cable and Comcast Corp., said the cable industry planned to spend billions of dollars on top of the $161 billion it had already invested over 13 years in a national broadband infrastructure, which is currently available to 92% of homes. Verizon said it alone was investing $23 billion in its fiber-optic network.
Industry watchers said they hoped that Google’s entry into the marketplace would spur competition and innovation, but they tempered their enthusiasm. In most places across the country, consumers have one or two options for high-speed Internet, usually from their cable or telephone provider. Service providers have been pouring tens of billions of dollars into upgrading their networks, but the speeds they are aiming for are not nearly as fast as what Google is proposing. Until now there has been little competitive pressure to force providers to take more aggressive action.
“The promise it represents is exciting,” said Ed Black, chief executive of the nonprofit Computer & Communications Industry Assn. “But people shouldn’t assume that this means we’ll suddenly have an amazing new player.”
Since 2006, Google has operated its own free wireless network in Mountain View, Calif., where it has its headquarters. It won a bid that same year to offer a similar service in San Francisco, which ran into trouble when EarthLink Inc., which was going to build the network, backed out and the plan ran into opposition from some city officials.
Mountain View’s wireless network stretches over 12 square miles and was installed over several months at a cost of about $1 million, said Ellis Berns, Mountain View’s assistant community development director.
“They’ve been very responsive and are continually upgrading the system with new equipment to improve the capacity and speed at their own doing, without requests from the city,” Berns said.
Google said it would accept proposals from communities interested in the service until March 26. Google will work with contractors to build the fiber-optic network, Ingersoll said.
Jeffrey Silva, an analyst with Medley Global Advisors, said Google’s Internet project wasn’t likely to make an immediate difference to the average consumer. But, he said, “10 years from now it could make all the difference in the world.”