There’s been a lot of speculation about Google’s plans to deploy Gigabit fiberoptic Internet. Where will they deploy? What are the criteria? How many homes will they serve? Will they favor cities, or rural areas?
Your guess is as good as mine. But as a part of the global tech community and as someone who has spent a lot of time at Google and with people from Silicon Valley, these are my guesses about what they might do.
Cities Offer Higher Returns
Cities have the kind of density required to deliver a lower cost-per-home deployment. Less cable, a single point of negotiation and contact, and the ability to deploy using lateral construction from fiber conduits means lower overall costs.
Multi-family housing means more customers per square mile. Baltimore has a city-owned conduit system which can serve over 90% of the area of the city — without requiring the use of poles or negotiating with third party utilities.
Rural Areas Cannot Be Served Profitably
Telephone companies receive funds from the Universal Service Fund to subsidize service in areas that otherwise cannot be profitably served. Google is not subject to the regulatory framework (Communications Acts of 1934 and 1996) that would give it access to USF funds; in fact, it has every incentive to fight to avoid falling under such regulation.
Google is not a charity, it’s not being subsidized by the government, and it is not a monopoly. There is no special reason why Google should care about making services available in rural areas, and there is certainly no profit motive. Rural service requires fuel, vehicles, and people on the ground. Every part of this is expensive; it’s why it loses money and why it has to be subsidized by USF funds.
Google simply has no motive at all to serve rural areas. I’ll eat cat meat if Google selects a rural area for this trial. It just won’t happen.
Tech Is Opinionated
Google has opinions. In the tech world, people take a stand: Google and Apple both expressed strong opinions about how a smartphone ought to operate. Opinionated software is an emerging trend in software tools. Software designers bake their opinions into the tools they create. People who use those tools end up adopting those opinions; if they don’t, the tools become counterproductive, and they are better off using different tools.
There is every reason to believe that Google’s opinion is that the suburbs are obsolete, and that that opinion will inform their strategy for building out a fiber network. Here’s why Google likely believes the suburbs are obsolete:
- Suburbs rely on car culture, which consumes time; that’s time that people can’t spend on the Internet, making money for Google.
- Suburbs are not energy efficient, requiring lifestyles that generate more CO2 emissions. Google has said it wants to see greater energy efficiency in America.
- Google CEO Eric Schmidt has said he wants to see America close its innovation deficit. There’s nothing innovative about the design of the suburbs. It’s a tired model.
- Schmidt has supported Al Gore politically and in his efforts to combat global warming. Regardless of what you might think of Al Gore or global warming, we have a pretty good idea what Google thinks of the issue.
- Gigabit Fiber in cities could utterly revitalize them. We’ve been looking for ways to fix our cities for the last 50 years. The last renaissance was powered by large-scale economics; a new renaissance can be launched with large-scale communications investment.
- Google’s employees are young, idealistic, and believe in self-powered transportation. It’s worth pointing out that the Google Fiber project lead, Minnie Ingersoll, is an avid cyclist.
The Suburbs Are Done
I’ve said it before. So have others. But I’m not promoting that they be subject to some kind of post-apocalyptic ghettoization, either, so calm down. No one’s threatening your commute or your backyard barbecue.
But what I am saying is that at some point we need to take a stand about where we’re going to invest in our future. About where we believe we can regain competitive advantage and efficiency.
I believe our only hope to do that is with smart, well-designed urban cores, connected with world-class communications infrastructure and fast, green, and efficient people-powered transportation. And I think Google believes that too. Bet on it.
14 comments ↓
another obsolete suburb screed
I like my suburb. Living in the city does not appeal to me one bit. Actually, given the chance, I would live out in the country and even further away from the city.
Didn't you run your past business in a suburb? Don't you still live in a suburb right now? You know you like it here 🙂
Bryan – no one's trying to change your mind. Do what makes you happy, but don't be surprised when you have to pay for that choice. All I'm doing is looking at what I think Google is likely to do.
I've purchased a house in the city, and while a variety of circumstances may have coincided to keep me in the suburbs for the last several years, I am most assuredly sick of it. It costs me significant time and money every day, and is nothing but a tax on my time. I'm looking forward to freeing myself of that tax.
I've always worked hard to try to understand the future, and I believe strongly in the argument I've presented here: that cities represent our best hope, and I'm willing to bet on it. Let's compare notes in 10 years.
The simple fact is that the suburbs CANNOT survive going forward in the next 50 years… it simple takes too much energy to maintain the infrastructure (roads, electric, FOOD, etc.) What is going to happen to baltimore and other cities is a reversal of the 1950s, 60s, 70s… those with money are going to move back into the cities because well honestly, they can. While there is going to be a significant gentrification that takes place, the underlying important factor is that the tax base is going to rise and the city is going to be able to improve its overall schools, trash, cops, etc. for the entire city.
My mind always seems to go back to when I had the opportunity to travel throughout the ex soviet union and one of the most noticeable things was that their infrastructure was amazing! But, as you drive on their 10 lane roads and look up at these MASSIVE concrete statues. They (like many empires) built everything on such a large scale, they were unable to maintain their infrastructure. I sometimes get scared that we are heading down the same road but then I remember how resilient and adaptive we are as a country. Trust me, when energy but fuel and electric increase over the next 50 years, people will be pouring back into the cities. Now… to figure out taxes, crime, education in the meantime
The simple fact is that the suburbs CANNOT survive going forward in the next 50 years… it simple takes too much energy to maintain the infrastructure (roads, electric, FOOD, etc.) What is going to happen to baltimore and other cities is a reversal of the 1950s, 60s, 70s… those with money are going to move back into the cities because well honestly, they can. While there is going to be a significant gentrification that takes place, the underlying important factor is that the tax base is going to rise and the city is going to be able to improve its overall schools, trash, cops, etc. for the entire city.
My mind always seems to go back to when I had the opportunity to travel throughout the ex soviet union and one of the most noticeable thing was that their infrastructure was amazing! But, as you drive on their 10 lane roads and look up at these MASSIVE concrete statues… you realize everything is crumbling and falling apart. They (like many empires) built everything on such a large scale, they were unable to maintain their infrastructure. I sometimes get scared that we are heading down the same road but then I remember how resilient and adaptive we are as a country. Trust me, when energy but fuel and electric increase over the next 50 years, people will be pouring back into the cities. Now… to figure out taxes, crime, education in the meantime
Thank you, Justin. I agree with you wholeheartedly. I believe that not only are suburbs not sustainable in the long-term, but that even if they were sustainable, we would not want to do so. The time drain they cause us makes the US uncompetitive!
Like all major change, it will take new generations for real shifts to occur. But what young person today would want to live in the suburbs if they had a choice to live in a well-designed functional urban environment where they can safely get around by bike.
The fact that we have a low supply of such cities in America today is not a valid argument against such a possibility. Look at Copenhagen, Portland, Paris. Those cities are leading the way. We just need to shift our priorities. Coupled with the strain on resources, it's easy to envision the future.
great article by the way. agree 100% and its going to be exciting to see where google chooses to go because is obvious that they'll have a good underlying reason.
As a real estate developer of multi unit properties in Baltimore City I certainly hope your vision comes true. I think for Google to choose a urban area is a no brainer but by no means makes the Suburbs obsolete now or anytime in the future. As you know most young city residents move into the suburbs when a family comes along. Almost 8 of 10. Until the cities start to address issues such as unreasonalbe property taxes, crime (and we all know Baltimore has it no matter what area you live in), poor educational opportunities and lack of quality housing. Who wants to raise a family in a 12 foot wide row home by the Harbor. Most people with money want good size homes with a yard to call their own. The housing and schooling opportunities in the surrounding county suburbs will continue to crush any hope of the cities rejuvanation until they themselves can compete. As far as the commute I look it as an opportunity for some me time. I don't always want to be connected. As someone who used to be a city dweller but now lives among the beautful farmlands of Northern Baltimore County I wouldn't have it any other way. So enjoy your bike ride to work, I just hope you make it or that your bike is still there when you get off.
Chris, obviously things need to change in cities for the kind of vision I am talking about to come to pass. But you talk as if change is impossible.
As an example, if Baltimore gets gigabit fiber, it will become a magnet for startups, which will increase its tax base, which will lower property taxes, which will further increase population and tax base, schools will improve, jokers will be voted out of office, crime will decrease, economics will equalize, and new urban designs will be implemented, ultimately resulting in an affordable, culturally rich, livable, walkable urban landscape.
You are more then welcome to waste time driving around every day. I'm only suggesting that you should be prepared to pay to do it, and there's no reason to expect the status quo will continue. It's not sustainable and it doesn't really make any sense.
The counties and the land development patterns there are a ponzi scheme and those economics are coming home to roost. Watch.
The utopia you speak of isn't possible. Nobody is going to lower property taxes, invest in city schools that produce the majority of non productive members of society and the city is about to lay off 200 police officers so I don't see the crime rates going down either. Yes, it could help reverse or atleast stabilize the downtown commercial real estate vacancy rates which have been increasing for years as companies seek larger-less expensive office space, more beautiful settings, less commute times and free parking for all their well paid employees who live in the suburbs. There are economics, demographics and politics that go way beyond Google making a city have internet at light speed. These issues will never be resolved. They have existed since the beginning of time. Therefore there will always be a demand for the suburbs and the special qualities they bring. As far as land development being a ponzi scheme, it is driven by demand from people who do not want to live in this urban landscape of sustainability you dream of. I also thought that one of the biggest benefits of this wireless world was to bring people from all over together to be able to do business together. A world without boundaries. For instance when I work from my home office I have the ability to use map searches to view pics of streets and the property/ building I am considering purchasing. I can pull demographics, property values, etc…. A Neighbor of mine is a day trader and utilizes the internet and needs fast reliable service as I do. So I do believe there is a demand for that service and most people would probably subscribe considering how limited the choices are in the suburbs. As far as profitability there is always some subsidization of initial infrastructue cost but as the net work would grow these cost would be absorbed and the maximum amount of subscribers including rural customers would be enrolled. Thinking long term as I am sure they do at Google, these subscribers will eventually add to their bottom line especially if it does not have to run a wire to everyone's house to provide their service as cable and telephone companies do. The suburbs will survive and thrive well into the future.
Chris, let's compare notes in 10, and then 20 years.
Meantime I've put you onto my list of people who are not going to help in changing things.
And I'm not attacking your lifestyle choice, I'm just saying that you should expect to pay more for it in the long run.
I don't understand why my opinion would get me on your naughty list. As a matter of fact I am very into making a change for the better. I am a green builder, I provide quality housing to low and moderate income families. I participate and am raising my children to understand the benefits of recycling, eating organic and choices of a healthy life style. I never said I wasn't willing to pay more. I think eveybody that moves to the suburbs understands there is a trade off. I'll spend the money I save on property taxes on gas. I just don't get why if I don't want to live in the city that makes my “lifestyle” not a good choice. I believe it is a better choice for my family and I. As you said only time will tell, and we can compare notes. Anyway, good article, even though I don't agree. It atleast makes you think about smart growth and sustainability for all.
Chris, you may well be right that it's a good choice for you right now. And I'm not suggesting you're in any way naughty. 🙂
I do disagree with you that the problems you cite cannot be changed, and to that end, I can only assume that if you believe they cannot be changed then you will not expend effort to actively change them. People don't spend time on things they think are impossible.
Long term, I think there are some crazy subsidies that have led to the development patterns that we've seen, and as those are eliminated or become unsustainable, we'll see major shifts that will surprise many people.
I participate in Neighbor Associations and the like that I have properties in. I see first hand what these neighborhoods are up against. I see the efforts made, the successes and failures. To think that these problems will ever go away in my lifetime is to say at the least overly optimistic. If your scenario were to come true where would this population go as the cities were “gentrified”? Would they be displaced? Would they then move to the obsolete suburbs? Or would it be necessary to expand through the ponzi scheme of land development as you call it, the urban areas in boundary as well as density. So even in an expanding urban landscape and economic growth there will always be a certain portion of the population that choose to live outside and commute into that city. Statistics have proven this again and again. Thus the need to track population growth and implement smart growth strategies. As far as the hand outs, kick backs, subsidies and tax breaks for land developers, have you looked at our government lately? In all seriousness development projects create jobs, provide property tax revenue and provide greater value to communities. Some / most major development projects would not be profitable with out them. Then how are you going to provide new housing to all the new people moving into the city.
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