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City Desk: Sep. 24, 2014

City, Google Continue Discussions About Bringing Ultra High Speed Internet Service to Santa Clara

After nearly a year of discussion about bringing Google’s optical fiber Internet service to Santa Clara, the city and the Internet behemoth are…still talking. But, now the conversations are entering a “second phase of planning to determine if, and when, Google will bring affordable ultra high-speed Internet connectivity to neighborhoods,” according to a Sept. 16 Silicon Valley Power press release.

Google has installed its fiber network in Kansas City, and is rolling out services in Provo, Utah, and Austin, Texas. Google is expected to make its decisions about embarking on fiber-to-the-premises (FTTP) projects in 34 cities, including Santa Clara, by the end of the year.

Phase one was a study of the city’s existing electrical and telecom infrastructure, as well as the ordinances and the permit process for extending the city’s existing optical fiber network into Santa Clara’s residential neighborhoods. Part of the criteria is the interest of residents in subscribing to the service. (If interested, let Google know by signing up at fiber.google.com/other/.).

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Santa Clara’s City-owned electric utility, Silicon Valley Power (SVP), also owns and operates an extensive fiber optic network that already serves businesses, schools and city facilities; which may give Santa Clara an edge in the Google Fiber sweepstakes. Added to the utility’s 100 years of experience in service delivery, that gives the city choices, regardless of what Google does.

Google’s services will cost from $70 a month for 1 gigabit per second (Gbps, a trillion bits/second) Internet, to $120 for Internet and TV. The company will also offer a basic 5 megabits per second (Mbps, a million bits/second) service for seven years, with a one-time installation fee of $300 that can be paid over the course of a year.

“We’ve worked hard since March to provide Google with the information they need to make the decision,” SVP manager of Customer Service Larry Owens said. “Becoming a Google Fiber City would bring affordable cutting-edge connectivity to our neighborhoods.”

Why Fiber, Why Cities Want It, and Why Google’s Becoming a Service Provider

Fiber’s promise is a dramatically faster Internet: download and upload speeds that are on the order of 100 times faster than the fastest Internet connections currently available via cable.

It means that people can be stream several HD movies, play online games, make Skype video calls, and use online apps simultaneously. Ultra high-speed Internet is also needed for cloud computing.

One Gbps is just a start. Optical fiber has almost unlimited growth capacity. For example, a copper wire can carry about six phone calls. A single fiber line can handle more than 2.5 million phone calls simultaneously.

Google’s interest in becoming a service provider is easy to understand. First, the faster your connection is, and the more Google knows about your interests and habits, the more advertising – and the more targeted and sophisticated advertising – Google can deliver. That means more advertising revenue.

Second, it makes Google independent of service providers that are interested in channeling you to content that’s profitable for them, and blocking or slowing delivery of content that isn’t. And with congressional Republicans pressuring the FCC to back off “net neutrality” rules, a good way for Google to protect its business model is to own the infrastructure.

However, Google’s service isn’t without strings attached. Kansas City’s experience indicates that one topic of the ongoing discussions is how much cities are willing to give away to be a Google Fiber city.

Kansas City’s development agreement gave Google free right-of-ways and guaranteed five-day permit turnaround, dedicated public staff, and city facilities and power for the company’s equipment, according to a report in last week’s Charlotte Observer. In short, Google got free, exclusive use of city assets.

Why would cities do that? One reason is that residents and businesses are fed up with the failure of existing service providers to improve the speed, quality and reach of their services. For example, South Korea, with the world’s fastest average Internet connections, averages 24 Mbps to homes, according to Akamai’s 2014 “State of the Internet” report – more than 10x the U.S. average.

Another reason cities are willing to make sweetheart deals with Google is that fiber infrastructure is an avenue to attracting businesses, especially as businesses look for ways to minimize IT costs.

For example, in Kansas City there’s a growing “startup village” where software entrepreneurs can rent a workstation in a fiber-connected house and start a business with no more than a laptop.

Connection speeds are key for tech startups. Large files and huge amounts of data can be easily shared – for example video uploads in seconds instead of hours. Low-cost video conferencing via Facetime or Skype is practical. Fiber also facilitates telecommuting, enabling companies to attract experienced employees who may not want to move.

Fiber can also deliver significant social return. Medical care can draw on experts from other places. Public services can have a “presence” in places where they don’t have offices. Public safety agencies can quickly integrate information from diverse systems. Museums can be visited virtually, letting everyone experience the world’s cultural treasures.

Schools can connect all students to all the resources they need, without the cost of equipment that’s going to be obsolete in a few years. Libraries can make their resources more widely accessible, and offer new kinds of resources. For example, they can let patrons “check out” specialized software such as 3D modeling or video editing tools; services that would be available for small businesses and startups.

But why does a city in the nerve center of Silicon Valley need fiber Internet? Santa Clara has no problem attracting businesses right now. However, without the ability to offer 1 Gbps Internet, Santa Clara and other Silicon Valley cities will begin to find themselves at a disadvantage vis-a-vis lower cost-of-living in cities such as Kansas City and Provo that can.

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