Google Fiber Moves into Austin -- and Remains Deep in the Heart of Uncertainty

Carl Weinschenk

On March 21, I poked a little fun at the fact that the next stop for Google Fiber is the small city of Olathe, Kan. The point of the post was to raise the issue of precisely what Google is up to: Is it really going to rewire America (or most of it)? Is it making a veiled threat to the cable and telephone industries to up their games, with no real intention of carrying through? Is it simply demonstrating what is possible with the right technology, the right amount of fiber and the right intentions?

Less than a month later, the situation is shifting. Multiple sources – including eWeek – report that Google Fiber is moving into Austin, Texas. No jokes about this one. The city already is high tech. Indeed, it is difficult to think of a better or more promising next step than Austin. Writes Nathan Eddy at eWeek:

Austin, a hotspot of Web-based startups, would be a natural fit for a community interested in super-fast Internet—Dell, Apple, Cisco and many other major tech companies have offices there, and thousands of graduates each year from the engineering and computer science programs at the University of Texas at Austin provide a steady source of employees that help fuel Austin's technology sector.

The Austin announcement doesn’t answer the question of what Google’s goals – and, hence, its tactics and strategy – are. A report by Bernstein Research assigns numbers to the project. TechCrunch reports on the analysis. The money quote from the study is included in the TechCrunch piece. Analysts Carlos Kirjner and Ram Parameswaran write:

“We remain skeptical that Google will find a scalable and economically feasible model to extend its build out to a large portion of the US, as costs would be substantial, regulatory and competitive barriers material, and in the end the effort would have limited impact on the global trajectory of the business.”

Business Insider offers slides from the Bernstein Research report.

As if to prove Google Fiber’s point – whatever that might be -- Netflix released its speed update for March on Monday. Google Fiber, at 3.45 Megabits per second (Mbps), retained its spot way ahead of the field. The four following Google were Cablevision/Optimum (2.39 Mbps), Cox (2.25 Mbps), Suddenlink (2.23 Mbps) and Verizon FiOS (2.15 Mbps).

The bottom line is that a move into Austin is a big deal. That said, it proves nothing about the company’s long-term intentions. Indeed, it’s quite possible that Google simply isn’t sure what it wants to do.

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