The Google Fiber Pipe Dream (or, Stop Dreaming and Do the Work Yourself, Lazybutt)

Google Fiber has managed to keep people excited for quite some time now. Dozens of cities did everything from present solid cases for building there to engaging in wacky stunts (like swimming in frozen lakes) to try and get the attention from the Mountain View company. Even after selecting Kansas City, MO (and a number of its surrounding suburbs) as the site for their build, many cities keep on insisting that they can somehow catch the Internet giant’s attention and score their own golden ticket. Make no mistake: I compare it to the prize bestowed by Willy Wonka because it’s just about as likely to happen.

Far too many people lose sight of what Google really is: an advertising company. Everything they do is centered around the idea that they can sell advertising. In the process, they create really awesome tools that get eyeballs. Google’s search product is still the gold standard. Gmail is more popular than any other webmail product. Android displaced everything but the iPhone to fight for the number one smartphone platform. What do these all have in common? They increase your exposure to Google’s ad platform, but they don’t incur a significant cost to do so. Even Google’s self-driving car is an attempt to free up commute time for, you guessed it, looking at their ads. This is why Google makes money hand over fist.

The question that should be asked is how Google Fiber fits into this mission. Yeah, it kind of encourages you to spend more time using their services, and it does create a way for them to directly sell TV advertising, but the capital costs of fiber are huge, especially when using active Ethernet. Google is on-track to make somewhere in the range of $12B+ in profits this year. The cost of deploying fiber optics nationwide is somewhere in the $300-400B range, and it runs an average of around $1500-2000 per served home. That would be a huge investment into a venture not guaranteed to break even. The history of overbuilders is littered with failed companies. Google in unlikely to sink a significant portion of its revenues into additional buildouts, so the odds of your city getting a break are pretty slim.

And that’s the point. Google isn’t going to build in cities that beg louder and more often. Heck, they might not build in any more cities at all. It selected Kansas City because there are major backbone fiber routes there (Sprint has its HQ in neighboring Overland Park, KS) and the city could provide expedited right-of-way. Does your city meet those criteria? Probably not. In fact, your city is probably only saying “but we really REALLY want it” and hoping that’s enough. Well, it’s not. Kansas City did the work to create an environment Google would want to sink their dollars into. What has, say, Lehi done? Arguably nothing but get their begging published in the Daily Herald.

That’s the lesson to be learned: if you actually want a fiber network, you’re going to need to do some work. By the time you’d be an attractive target for Google Fiber, you’re about 90% of the way towards building it yourself, either as a co-op or a municipal network. At that point, do you really want to spend years or decades hoping that Google or another company will do for you what you could do for yourself?

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5 Responses to The Google Fiber Pipe Dream (or, Stop Dreaming and Do the Work Yourself, Lazybutt)

  1. charlesH says:


    Regarding Orem City budget numbers.

    My understanding is as follows:
    1) city owes the bond holders ~7%/yr of ~20% of $175M = ~$2.45M/yr
    2) city is supporting Utopia operations ~20% of $2.5M/yr = ~$500k/yr
    3) city is receiving from current Utopia subscribers ~$25/m x 12mo x ~2500subscribers = ~$750k/yr

    In the 2012-2013 budget I see $3M allocated to Utopia (that ties pretty well with 1 + 2 above).
    on page 92: 30-3995-018-000 Cont From – Fund 10 – UTOPIA 0 0 0 3,000,000

    However, I see no mention of the $750k revenue coming from subscribers anywhere in the budget. What am I missing?



    • Jesse says:

      It’s possible that this revenue is being realized as part of the UIA. I’m not familiar with the particulars of Orem’s city budget, so you might need to tap into the city manager or someone in a similar position for clarification.

  2. Doofus says:

    Exceptionally well stated, Jesse. Keep up the good work.

    Your thoughts here remind me of the magic pills legislators love to prescribe regarding improving public education in Utah. Every one has a scheme. The current nonsense is to take over all federal lands and somehow that will improve funding for public education. In reality, there is only way to fix Utah’s embarrassing dead-last standing and that is to PAY for it.

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