Google Fiber has finally announced its plans for the future after weeks of dramatic speculation that it will lay off half its workforce and give up on fiber-optics entirely. Google has now confirmed our expectations: they are pausing new Google Fiber cities, continuing to expand within those where they have a presence, and focusing on approaches that will offer a better return on investment in the short term.

Nothing Worth Doing Is Easy

In short, Google has found it more difficult than they anticipated to deploy rapidly and at low cost. And in discussions with various people, we think it can be summed up in this way: building fiber-optic networks is challenging and incumbents have an arsenal of dirty tricks to make it even more so, especially by slowing down access to poles.

That said, Google is not abandoning its efforts to drive better Internet access across the country. In the short term, people living in modern apartment buildings and condos will be the greatest beneficiary as Google takes the Webpass model and expands it to more cities. But those that hoped (or feared) Google would rapidly build Fiber-to-the-Home (FTTH) across the country are likely disappointed (or slightly relieved, if they happen to be big incumbent providers). 

This is a good moment to talk about the lessons learned from Google Fiber and what we think communities should be thinking about. 

Let's start by noting something we have often said: Google Fiber and its larger "access" approach have been incredibly beneficial for everyone except the big monopolists. Its investments led to far more media coverage of Internet access issues and made local leaders better understand what would be possible after we dismantle the cable broadband monopoly. 

Benoit Felton, a sharp international telecommunications analyst wrote a very good summary of Google Fiber titled Salvaging Google Fiber's Achievements. Some of my thoughts below overlap his - but his piece touches on matters I won’t address, so please check out his analysis.

I want to focus on a few key points.

This is Not a Surprise...

In our last Community Broadband Bits podcast, Christopher and I discussed the August 10th U.S. Court of Appeals for the Sixth Circuit decision to reverse the FCC’s February 2015 ruling against state barriers. We mentioned Harold Feld’s article about the ruling posted on his website. In keeping with most matters of importance in the municipal Internet network field, Harold expertly sums up the history of the case, the arguments, and what the outcome could mean for the future.

Feld gets down into the crux of the argument that won over the three judges in the Sixth Circuit - the need to establish if it is states or federal agencies that make the decisions regarding whether or not local governments can provide telecommunications.

Determining the answer was a multi-step process and Feld explains how the FCC came to the conclusion that they had the authority to preempt the laws and the states' arguments against it. This was, after all, a test case and Feld describes why the FCC chose Chattanooga and Wilson.

Read more on Feld’s Tales of the Sausage Factory, where he speculates on how the big incumbent providers will react to their win and what is next for municipal network advocates. From Harold:

As with most things worth doing in policy land, it’s disheartening that it’s an uphill fight to get to rational policy. The idea that states should tell local people in local communities that they can’t invest in their own local infrastructure runs against traditional Republican ideas about small government and local control as it does against traditional Democratic ideas about the responsibility of government to provide basic services and promote competition. But that’s how things work in public policy sometimes. We can either give up and take what we get, or keep pushing until we change things for the better.

EPB customers love the fast, affordable, reliable Internet access they get from their muni and they appreciate the way its smart-grid helps them save money on their electric bill. According to a new J.D. Power report, their municipal utility is also the highest rated mid-size utility in the South for customer service and reliability.

Double Honors

Just a month ago, Consumer Reports magazine rated EPB the best TV and Internet access utility in the county for customer satisfaction, as chosen by a reader survey. The J.D. Power report went on to rank EPB number two in the country in the category of municipal or investor-owned electric utility.

The Times Free Press reports that in 2015 EPB Fiber Optics earned a net income of $23.5 million while the electric division earned $3.5 million. EPB President David Wade said that the smart-grid has reduced power outages by 60 percent and contributed to customer satisfaction by enhancing reliability of the system.

"The lesson that utilities can learn from other high-performing service providers is that to excel you need a culture that puts customers and employees first," said John Hazen, senior director of the utility practice at J.D. Power. "And because customer expectations continue to increase, you need to have a mindset of continuous improvement to keep up."

It looks like EPB has that lesson committed to memory. From the Time Free press article:

EPB Chairman Joe Ferguson said the favorable grades from EPB customers reflect the utility's local ownership, public service and management focus on serving the customer.

Minneapolis, MN - The 6th Circuit Court of Appeals decided today to dismiss the FCC's February 2015 decision to encourage Internet investment in Tennessee and North Carolina. Tennessee and North Carolina had both restricted local authority to build competitive networks.

"We're disappointed that the FCC's efforts to ensure local Internet choice have been struck down," says Christopher Mitchell with the Institute for Local Self-Reliance. "We thank the FCC for working so hard to fight for local authority and we hope that states themselves will recognize the folly of defending big cable and telephone monopolies and remove these barriers to local investment. Communities desperately need these connections and must be able to decide for themselves how to ensure residents and businesses have high quality Internet access."

ILSR and Next Century Cities filed an Amicus brief in support of the FCC's position. View the Court's Opinion here.

Contact:

Rebecca Toews

rtoews@ILSR.org

612-808-0689