Thursday, February 11, 2010

Rejecting status quo, Google plans digital networks

Boston seeks to be a test site for the 20-times-faster service

Google says it will decide later this year where it will build digital networks to showcase ultra high speed service.

Yesterday, the search engine titan said it will create powerful new digital networks in several communities to push cable companies like Verizon Communications and Comcast Corp. to improve their products.

Google will run optical fiber to between 50,000 and 500,000 customers in locations it has yet to choose. The cables, installed underground or strung between utility poles, can carry much more data at far greater speeds than traditional cable or wireless technologies.

The company is asking individuals and local governments to submit proposals by March 26 to have networks built in their communities.

The prospect of being a test site for the fastest US data networks had officials in Boston and elsewhere in Massachusetts saying they are eager to apply. They hope competition from Google will drive cable bills down.

“We absolutely will be in. We’re going to try to get our application in early,’’ said William Oates, chief information officer for the City of Boston.

“I like this,’’ said Joseph Petty, a city councilor in Worcester. “This is something the city would be very much interested in . . . to bring down prices.’’

Google will select sites this year. “We might choose a small neighborhood in an urban area,’’ said Richard Whitt, Google’s telecom and media counsel. “We might also choose a rural area.’’

The question is whether Google will become a major broadband provider, or simply push companies like Comcast and Verizon to build faster networks.

“If Google demonstrates there is a demand for these services, they might be more tempted to opt for more deployment,’’ said Carl Howe, a telecommunications analyst with Yankee Group in Boston.

“Their real goal seems to be to illustrate what’s possible with really fast broadband,’’ he added.

That would be a boon for Google’s core Internet business. Faster broadband connections would make it easier to use Google products, including its new social-networking service and its popular video site YouTube.

But Doug Williams, an analyst at Forrester Research in Cambridge, said it’s unlikely Google would build a nationwide telecom network, given the expense. “Fiber to the home, starting from scratch, would be an enormous, enormous investment,’’ he said.

Google would have to dig up streets and yards to lay cable, negotiate with phone companies for the right to hang fiber from their poles, and pay to run the fiber to thousands of households.

Verizon, for example, is spending $23 billion on its own fiber-optic-to-the-home network, which will reach just 18 million homes in 16 states.

Google does not yet know what its total investment will be, Whitt said, but the price of its Internet service would be competitive with existing rates.

Google could also make money by leasing access to its high-speed networks to other Internet and cable providers, a possibility mentioned by Whitt.

Google is betting that once consumers have access to speeds at least 20 times faster than any current service offers, they will come up with new ways to use it, including for ultrafast downloads of high-definition movies or live streaming of 3D video.

In an e-mailed statement, Verizon spokesman Phil Santoro said: “Google’s expansion of its networks to enter the access market is another new paragraph in this exciting story.’’

Comcast declined to comment, but forwarded a statement from Brian Dietz, spokesman for the National Cable & Telecommunications Association:

“The cable industry has invested $161 billion over the past 13 years to build a nationwide broadband infrastructure that is available to 92 percent of U.S. homes. We will continue to invest billions more to continually improve the speed and performance of our networks.’’

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