When Google deploys a fiber -to- the -
home network in Kansas City, Kan.
(and later in Kansas City, Missouri )
its success for the project will not be
measured in dollars but in users.
And in promoting this view of
broadband Google shows a keen
understanding of how broadband
has the potential to disrupt
everything — the value isn ’t in
delivering broadband — it’ s in
delivering services over broadband.
That doesn ’t mean that broadband
isn’ t valuable , but it ’ s also not the
highest value — much like electricity
is valuable , but it ’s the air
conditioning or refrigeration that it
enables that people spend more
money on. Which runs somewhat
counter to the argument put forth
by ISPs , especially those keen to
meter broadband — that the value is
in the access itself . Instead of
viewing broadband as a gateway to
the web, and trying to capitalize on
that by offering faster speeds that
people will eventually pay more for
as Verizon is doing with FiOS, many
ISPs view broadband as something
that’s valuable in and of itself – and
as such it might make sense to
charge people by the byte.
Google believes broadband may
be the alpha, but it ’s not the
omega
So when Matt Dunne, manager of
U. S . community affairs for Google ,
spoke at the Greater Kansas City
Chamber of Commerce 2011
Innovation Conference back in July
and explained how Google feels like
it will be successful when people
convince their neighbors to
subscribe to gigabit services and use
the applications that Google and
others develop for gigabit networks ,
he is buying into the idea that
broadband is just one step in the
value chain, rather than the entire
value chain.
Dunne also said Google plans to
make its pricing and offering for
gigabit networks clear this fall with
the network itself coming online in
the first quarter of next year . We
can expect the pricing and offering
to be more consumer than business
oriented, given how Milo Medin ,
who is in charge of the Google Fiber
project , previously scoffed at other
cities ’ gigabit networks, which
charge hundreds of dollars for
access. This also fits with the idea of
broadband as a gateway drug to
other services.
Dunne also made Google ’ s point of
view abundantly clear in how he
answered questions posed by the
community about how they could
work with Google . The bottom line
is they shouldn’ t really want to.
Dunne tried to convey that Google
wants people to develop applications
for this network that Google will
provide, but that in order to do it ,
they don’ t actually need Google . So
most questions about creating
entrepreneur centers and ways for
folks to “ work with Google ” on
creating apps, were met with what
seemed like the bewildered air of
someone who has the Silicon Valley
mentality of entrepreneurship ,
where you just go out and start
something . Dunne was telling the
people in Kansas , that the tools
were there. They just needed to use
them to actually create something
cool.
If broadband is only a small part in
the value chain , how does a
company recoup the costs?
Again, in this view broadband is a
tool, rather than the solution . I’m
curious how Google ’s model plays
itself out in terms of building and
sustaining a broadband network . If
it can build out the network and sell
access while making money on that
access, it could change the economic
model for providing broadband. If it
manages to build the network and
capitalize on it to sell Google
services and ads to subsidize the
networks, that’s less revolutionary,
but it does offer a competing option
for broadband in both Kansas Cities.
It also provides another economic
model for broadband build out .
One of the best analogies for these
differing views on broadband comes
from the hardware industry.
Hardware vendors often confuse
their boxes with the value, when in
today’s connected world it’ s the
services that matter . Look at how
the Kindle platform has evolved .
This isn ’t a hardware business for
Amazon, so much as it ’ s providing a
service . Can broadband providers
evolve to deliver services their
consumers will pay for in a
competitive environment ? Some like
Verizon, or Comcast are trying with
new services offerings. However, for
every step forward it seems like ISPs
take another step back when they
block competing services or
introduced tiered plans or caps .
But in this conversation with Kansas
City economic leaders Dunne offers a
bit of hope for those almost 1 ,100
other cities who tried for Google ’s
gigabit network and didn ’t get it .
He said Google was in “ active
conversations with other
communities right now ,” to bring
fiber to their areas. However, he
promised the leaders of KC that
because they were the first, they
can expect exclusive access to
Google fiber at least through the
“first couple of quarters of next
year” before a next area is started.
Let’ s see how much change Google
can bring.
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