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Could Google Fiber go nationwide?

Will Google Fiber expand across the U.S. or is it too expensive, as a recent Goldman Sachs report is claiming? Let’s take a closer look.
December 11, 2012
Google Fiber

Since Google rolled out its high-speed internet and cable service in parts of Kansas City there has been lots of speculation about whether the search engine giant might look to take the service nationwide. The response from people eligible for the service seems to have been pretty positive so far. Here’s a full breakdown of the Google Fiber service on offer, the top tier plan offers a 1Gbps Internet connection with Fiber TV and a Nexus 7 as remote for $120 per month.

The tech press has also generally been impressed with Google’s Fiber proposition, as the company appears to be offering a better quality service than the ISPs everyone is currently stuck with. There have been some “come to my city” pleas popping up across the web, but Google execs are not in the habit of sharing their long term plans. Is Google Fiber an experiment, or the first wave in Google’s move to completely control and own every aspect of your online experience?

A recent report from Goldman Sachs is looking to throw a big spanner in the works as it claims that building a cable network is prohibitively expensive and it could cost over $140 billion to cover the whole country. The report discusses how many homes Google could hope to cover and what it would cost, claiming that covering even 50 million households would cost $70 billion. There’s also an estimate that Verizon has spent $15 billion to cover 17 million homes with its FiOS fiber network.

It’s really no surprise to learn that building the network would be expensive, but who would expect Google to cover the entire country overnight? Why would the company have to outlay $140 billion straight away? Surely the sensible plan would be to cover populous urban areas first and build up the income from customers to fund further building. Google has $45 billion in the bank, it saved another $2 billion just last year by avoiding paying taxes, and we’re pretty confident getting credit would not be a problem.

Realistically there always comes a point with networks where serving a small number of people in rural areas does not offer enough of a return for a company to support the infrastructure. Usually they simply don’t bother, but often government will step in with subsidies that make it worthwhile. The benefit of building out Google Fiber goes beyond the subscriptions to the service for Google – it would benefit their entire empire. No doubt the company will crunch the data on Kansas and gauge public demand before it makes another move, but don’t be surprised if Google Fiber spreads.

What do you think? Hands up if you want Google Fiber to come to your home.