Google Fiber is Google’s attempt at an FTTP (Fiber To The Premises). In short this is the search giants attempt to offer internet and TV services direct to the public. This is certainly one of Google’s biggest ventures and analysts predict by 2022 Google could be providing internet and TV services to over 8 million US homes at an overall cost exceeding 7 billion dollars. However, Google has a long way to go before then and certainly will have their work cut out. With such expansion aspirations it would be fair to assume that the most costly part of Google Fiber would be laying the groundwork. Literally digging the roads, laying the cabling and getting so many homes (in such a short time-frame) set up. However according to Google this is definitely not the issue.
Yesterday at the COMPTEL telecoms conference in Dallas, Milo Medin (the head of Google Fiber) made it clear that the biggest cost (and hurdle) in the deployment of Google Fiber is TV programming. According to Medin TV Studios are demanding fees for their TV programming which are significantly higher than what the TV Studios are charging the current big TV players. Medin even went so far as to say in some areas the figures are twice as much as what others are paying. “We may be paying in some markets double what incumbents are paying for the same programming“. Google more than anyone understand the importance the role of TV programming will play in the overall success (or failure) of the Google Fiber project. Google know that trying to sell internet services is largely dependent on what TV services the internet providers can lump in. Consumers are much more inclined to buy a package – the so-called ‘triple-play bundles’ (TV, internet and phone services) compared to buying an individual service. As a result, you can bet Google are determined to secure good enough TV programming to ensure they can offer competitive all-round packages.
With this in mind Google know TV will be the driving force in selling their fiber based internet and in reality cannot afford not to pay the rates being quoted. However, that doesn’t mean they have to like it. The recent comments made by Medin maybe just venting but are far more likely to also be a way to actively voice to the world what will slow down Google Fiber’s (and Google’s) ever-march forward. If you want to know more about Google Fiber then you can check out its current expansion plans (plus check if it’s coming your way) by heading over to the official site.