Google to Test 1 Gigabit Broadband with Experimental Fiber to the Home Network

Event Summary

February 10, 2010—Google has announced plans to build and test ultra high-speed broadband networks in a small number of trial locations across the United States. It plans Internet speeds of 1 Gigabit per second using fiber-to-the-home connections to at least 50,000 and potentially up to 500,000 people. Its goal is see what developers and users can do with ultra high-speeds and develop new ways to build a fiber network. It plans to share key lessons learned with the world, and will operate the test as an “open access" network.

Current Perspective

• Current Perspective: Positive on Google’s plans to provide trial customers with Gigabit-speed broadband because the experimental fiber to the home (FTTH) network could foster new applications enabled by the high speeds and Google has promised to share its lessons learned in the experiment. Google’s proposed test speeds are nearly ten to 20 times faster than any current commercial DOCSIS 3.0 service tier and about 100 times faster than the mid-tier broadband speeds offered by telcos and cable operators today.

• Vendor Importance: High to Google, because of the opportunity to become a trial network broadband service provider, but this could depend on the cost of building an experimental FTTH network. Even if Google is able to keep the cost per home passed to $1,500, with half a million potential homes involved in the test, it could cost Google $750 million just to build the network—even before operational support costs. (Verizon’s FiOS costs are estimated to be just under $1,500 per FiOS network home passed.) Since Google has no intention to become a nationwide network service provider, the expense could seem too high to shareholders for a just a “test lab.”

• Market Impact: Low on the national consumer network services market in the near term, because Google won’t even begin to build anything before 2011; it plans to spend 2010 evaluating RFI responses from various communities.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Actions - Vendors, Competitors, End users

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