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Why Google is giving up on its dream to bring super-fast broadband to everyone

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Alphabet, the parent company of Google, announced on Tuesday that it was curbing its expansion of Google Fiber, an ambitious effort to bring blazing-fast internet access to a number of metropolitan areas. It’s the latest setback for those who hope to bring speeds of 1 gigabit per second — about 50 times faster than a typical connection — to every American.

A few dozen cities in America have next-generation broadband networks that offer gigabit speeds. These super-fast connections were supposed to revolutionize Americans’ experience of the internet and rev up the country’s noncompetitive broadband market.

When these networks were being built, advocates pointed to a number of potential applications. Gigabit networks, they promised, would enable users to interact in complex virtual reality environments. They’d make possible good-as-life teleconferencing that could allow seniors to visit doctors from home.

But six years after the first super-fast connections went live, even proponents concede no “killer” gigabit application has emerged. Most of their potential, critics say, is simply ignored by users. And building gigabit networks nationwide would be a colossally expensive undertaking.

That has caused even some former enthusiasts of these networks to wonder whether the early hype around gigabit networks was misplaced. Perhaps it makes sense to settle for more incremental — and much less expensive — upgrades to the networks we already have.

Fiber optic networks were supposed to be the internet’s future

Chattanooga, Tennessee, was a gigabit internet pioneer.

Most Americans get their internet via telephone and cable television wires that have been in the ground for decades. These lines weren’t designed to carry digital data, and as a result internet service over them tends to be slow. New fiber optics networks, which send data as pulses of light along strands of glass, really are better.

The first Google Fiber network went live in Kansas City in 2013.

Along with making money, the company bosses said they hoped to strengthen the internet’s technological foundations.

“We don't want incremental change,” Google Fiber’s Kevin Lo said in a 2012 interview. “Offering you a 10 Mbps service and edging it to 50 Mbps and then 100 Mbps, that's not what drives real innovation.”

Google set an initial goal of signing up 5 million subscribers in its first five years. More than 1,100 municipalities applied to be part of the program. The company has expanded the service to seven cities so far, but it now looks like the expansion phase is winding down.

Google was a pioneer, but it wasn’t the first to reach gigabit speeds. That honor falls to Chattanooga, Tennessee — population 173,000 — which built a publicly owned fiber optic network in 2010, making it the first American city to offer gigabit speeds citywide. The network cost $330 million to install and initially offered gigabit speeds for $350 a month — a price that has since fallen to $70.

Last year, Chattanooga demonstrated just how fast fiber optic networks can be when it boosted its top speed to 10 gigabits per second. To put that in context, that’s more than 500 times faster than the average speed of a US internet connection of 15.3 megabits per second.

When it began, Chattanooga officials spoke of the project as part a longer-term revitalization of the city’s deindustrialized economy. They believed that having one of the nation’s fastest broadband networks would give the city a decisive economic advantage — allowing the city’s residents to use, or maybe even develop, the next generation of internet applications.

And Chattanooga wasn’t alone; there were dozens of government-led efforts to install fiber in small cities nationwide.

The nation’s largest internet providers — Comcast, Verizon, AT&T — have rolled out some fiber offerings as well.

Advocates want the feds to push a nationwide fiber network

As a result, about 14 percent of Americans have access to gigabit speeds today. That’s not nearly enough for Susan Crawford, a professor at Harvard Law School. In her book Captive Audience: The Telecom Industry and Monopoly Power in the New Gilded Age, Crawford called for a massive national fiber project comparable to Dwight Eisenhower’s creation of the National Highway System.

The gigabit applications we’ve seen so far, she told me, are only the vaguest hints of what’s to come.

“One helpful analogy is to the history of electrification,” she said. “We thought when electricity first came on the scene it would just be a few street lights, maybe one light at home.”

Crawford dismissed talk of building gradually on current speeds. In her view, gigabit networks represent a revolution over current broadband, not simply a marginal improvement.

“It’s a phase change,” she said, “like ice turning into water.”

A few countries, notably South Korea, have invested more in super-fast networks than America has. But there isn’t yet much sign that the faster networks have given these countries a big technological edge.

Crawford argues that’s because countries like South Korea lack the United States’ entrepreneurial dynamism.

“If you come up with something there, you just get bought by Samsung,” she said.

Skeptics say a gigabit fiber network isn’t worth the cost

Of course, there’s another possibility: Maybe people just don’t have any use for so much bandwidth. That’s the view of Doug Brake, of Information Technology & Innovation Foundation, a think tank funded by foundation and government grants as well as donations from firms such as Google and IBM.

“There are no apps today and no apps on the horizon,” he said, though he acknowledged that development of new applications would probably proceed more quickly with far broader gigabit coverage.

The basic issue is that even the most bandwidth-hungry of today’s applications use far, far less than a gigabit — 1,000 megabits per second — of bandwidth. Right now, one of the most bandwidth-hungry applications out there is Netflix. Netflix recommends users have at least 3 Mbps of bandwidth for standard-definition video — meaning that you could stream about 300 Netflix videos simultaneously on a 1 gigabit connection. If you want Netflix’s highest-quality streaming, called Ultra HD, that requires 25 Mbps. So a gigabit connection would allow you to stream 40 Ultra HD videos at a time.

“People throughout history have been proven wrong, so I’m open to that,” Brake said, “but nothing before our eyes justifies spending hundreds of billions of dollars on this stuff.”

He rejected Crawford’s federal approach as “an absurd waste of government resources.”

To the extent that there’s any problem with US internet service, he said, it’s with connectivity in remote, rural areas.

The focus of policy should be on “making sure our nation’s poor have access to the internet at acceptable speeds,” he said. For the most part, that means incentivizing the major broadband providers to expand and upgrade their existing networks, which are often much slower than 1 gigabit.

Brake points to Vector DSL and DOCSIS 3.1, new standards that allow telephone and cable networks, respectively, to carry more data than before. He also highlighted the forthcoming fifth generation of mobile broadband (5G), which will have speeds about 10 times those of 4G devices.

With that kind of steady progress, he argues, it would be foolish to spend billions of dollars on a fiber networks that would deliver far more bandwidth than most households know what to do with.

New networks have benefits beyond gigabit speeds

Blair Levin has a long record as a cheerleader for faster broadband networks. He oversaw the creation of the Federal Communications Commission’s National Broadband Plan in 2009 and 2010. Then he led Gig.U, a private group promoting gigabit networks on college campuses.

But his enthusiasm for gigabit networks has cooled a bit in recent years — a situation he calls “highly ironic” given his earlier views.

“There’s nothing magical about a gig,” he said. “The gig has become the marketing nomenclature.”

It’s not the speed of the networks he cares about, but their impact on the broader broadband marketplace.

When he and his colleagues set out to write the National Broadband Plan in 2009, Levin said, most US households had no more than two options for broadband service — usually a cable company and a local telephone company. The weak competitive pressure inherent in that structure reduces firms’ incentive to invest in better technology, especially because building a new network can cannibalize usage of existing networks.

"I don't begrudge anyone their return on investment,” Levin said. However, he noted, the major providers’ incentive “is not to provide ‘better, faster, cheaper,’ but to maximize return on investment."

So without pressure from outside, incumbent broadband providers have a tendency to rest on their laurels.

In contrast, when a third party announces plans to build a new network in a particular city, the local cable and DSL providers often responded by offering faster, cheaper service of their own. Comcast, for example, recently announced a new 2 gigabit cable service that will be available in both Chattanooga and Atlanta, Georgia — a Google Fiber city.

Fiber upgrades are losing momentum — and that might be okay

Google Fiber’s rollout was painstaking and slow, and the project failed to meet its growth goals.

From 2014 onward, the company required wannabe “Fiber cities” to promise they’ll expedite Fiber’s installation in various ways. These included providing detailed information on and access to existing infrastructure, streamlined construction permitting, and other concessions. Getting cities to buy into the whole program has proved difficult.

AT&T is continuing to expand its fiber optic network, called Giga Power. Verizon invested heavily in its own fiber optic service, called FiOS, over the past decade. But in recent years, new FiOS investments have practically ground to a halt.

All three firms have recently signaled plans to shift away from laying fiber lines directly into subscribers’ homes. The new initiatives revolved around covering the so-called “last mile” using 5G wireless, which is easier to install but runs at slower speeds.

Democratic presidential nominee Hillary Clinton has proposed an additional $275 billion in spending on America’s infrastructure over the next five years. Some of that money would flow to boosting internet access to underserved areas. Another tranche would go to grants for towns looking to create “modern digital communities,” part of which would likely to go fiber buildout.

Levin and Crawford praised the proposal as a step in the right direction. Brake praised it too, citing its focus on broadband availability (rather than speed) and its neutrality as to which technology to employ.

But more ambitious proposals, like Crawford’s dream of a national, federally subsidized fiber network, don’t seem likely to materialize. “Let’s get real,” several experts told me.

Maybe that’s not such a bad thing. Right now, incremental improvements to existing broadband networks seem to be providing most Americans with plenty of bandwidth for today’s applications. On the other hand, maybe some scrappy tech entrepreneurs in South Korea will shock everyone into rethinking the question.

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