Google goes to the 'last mile' with FTTH tests

Thursday 11 February 2010 | 11:43 CET | Market Commentary
Google announced plans to roll out one or more FTTH test networks in the US this year. The company wants to offer broadband at 1Gbps at "competitive" prices, using open access networks with multiple service providers. Google announced a call for interest from local government bodies to partner on the networks, open until 26 March with the intention of starting roll-out this year. Google aims to test the very high-speed service with 50,000 to 500,000 users.

Given the cost of the plan (connecting 500,000 homes will easily cost USD 500 million), Google clearly believes in very high-speed broadband. Docsis 3 (up to 100 Mbps), VDSL (up to 40 Mbps) and FTTP (up to 50 Mbps) are already available in parts of the US, but if we take Google at its word, its tests will be in areas where these networks aren't available; Google talks about networks 100 times faster than those currently available. The speed of 1 Gbps means point-to-point networks, as the current GPON standard goes to 2.5 Gbps (download) shared over 32 or 64 homes.

Google's existing infrastructure is often a source of mystification. The company has a large backbone and numerous data centres around the world. That it now makes the first step towards the 'last mile' is a huge surprise. It shows Google's dissatsifaction with the currently available speeds, the limited geographic coverage of such speeds, current price levels and the government's plans to bring broadband to a larger public.

Google can clearly handle the required investment. At the end of 2009 the company had a cash position of USD 24.5 billion. After a number of years, a FTTH network also becomes self-financing. In other words, if Google really wanted to, it could connect possibly the entire US with fibre.

Google plans an open network and is looking to test a new way of rolling out a network. This shows the copany is clearly looking at international developments and wants to use the newest methods and technologies. Still, there will be stumbling blocks, as this is a new market for Google. The success of an open network strongly depends on competing service providers and good wholesale prices. There is also the risk that competing parties will complain about Google's growing market influence.

With these plans, it appears Google will keep the ranks very busy in the coming months. Only more details on the project are awaited.

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