Tuesday, October 1, 2013

Google Moves Ahead With South Austin Deployment

I spoke with someone this morning, who politely asked not to be identified, and who provided me with FIRST-HAND information that Google Fiber is coming to the South Congress and South Lamar corridors first! That means us!!!! 

After completing pole inspections, they will string a main fiber along the poles, and then branch each fiber leading to homes from that. Google is on-target for providing residential service beginning early 2014. They will also be providing free service to selected public buildings like libraries. Potential customers have been asked to submit their email addresses and locations so Google can plot out areas of interest. The next step we're anticipating is placing a refundable deposit down to put our money where our mouth is. ;) Submit your email address and zip code here: https://fiber.google.com/cities/austin/

The equipment and cabling is no more intrusive than having a cable modem. They run a cable down from the pole to a box on the outside of your house. Inside, you have a box which you attach your computers onto. Google Fiber also provides service tiers with television, DVR and Wifi. Free telephone service can be arranged through Google Voice, or you can choose from hundreds of providers who charge a fraction of what Ma Bell charges.

I'm also told there is a newspaper article today where AT&T are making some noise about a competing service. I haven't read it yet, but I know their previous claims were only about whining so they could get access to the same sweet fast approval process that Google is getting. AT&T also wants Google-like terms so they can withdraw service from less-profitable neighborhoods. They're currently forced to provide service to almost everyone, as a condition for the right to operate under the protection of artificially high barriers against competition (essentially a monopoly).

Some folks have asked me why they should pay Google a flat $300 installation fee (payable in monthly $25 installments through the first year) for the 'free' Internet tier, delivering 5 megabit service for the next 7 years or more, when they can pay the fine folks at AT&T $46+fees/mo (after promo expires) for "up to" 6 megabit "Uverse Elite" service? Well, is saving $3,564.00 a bad thing?

Other folks are uncertain they'd ever have a need for a gigabit (1,000.00 megabit) Internet service for $70/mo when the fine folks at Time Warner will provide "up to" 20 megabit service for $72.04+ (est. after the promo price expires). Well... that would mean 50+ times more speed for a couple dollars less. You don't want that? You don't HAVE to use all that speed, you know. But TW will still bill you the full amount for their service, and undeniably do a lot worse at providing you the full percentage you're paying for.

AT&T and Time Warner's Internet divisions operate at a 95% or higher profit margin. Likely higher. This means that 5% or less of what they bill you for your service, pays for every expense of bringing it to you; equipment, utilities, maintenance, wages, insurance, etc. The rest is raw profit. The idea that bandwidth is expensive, and should be metered and billed by consumption, is all their way of tricking you into thinking that what you get is "affordable" and "works good enough". In the marketplace, they are creating a false shortage to drive prices up. 

That's how a cartel works, and there's a reason it's widely illegal, even when selling genuinely depletable resources like oil. Bandwidth isn't even something that gets used up. But that's the impression given by Internet providers who meter it, and who then make hay out of managing it and dealing with "abuse". It's dead simple: they ought to use a fragment of their magnificent profits to expand capacity to meet their customer's needs. Instead, they pretend that they have to raise prices due to supposedly rising costs. Not that they appreciate being asked to show their books. The truth is that costs have been steadily dropping, and they've been spending almost nothing on expanding the infrastructure.

While providing mind-staggeringly higher speeds than the establishment, and investing in brand-new state of the art cabling and equipment, Google will still break even or show a modest profit. The reason AT&T and Time Warner won't do that is: GREED. And keeping up appearances.