Category Archives: Broadband

AT&T, Broadband, DirecTV, M&A, TV, Video

Thoughts on the new AT&T

AT&T this morning held a conference for financial analysts in Dallas, at which it outlined both its strategy and its financial guidance following the closing of the acquisition of DirecTV a few weeks ago. The event was live-streamed, and the slides from the various presentations are available to download from this page (where I assume a replay of the conference will be available shortly too). In this piece, I’ll share my thoughts in some depth about some of the key announcements, and briefly hit a few highlights on some other items towards the end, before wrapping up with my conclusions on the prospects for the new AT&T.

Note: for broader context on the TV business that’s central to much of what’s below, see my post yesterday on cord cutting, which provides subscriber growth trends for the largest US pay TV providers.

Putting the new AT&T in context

Firstly, I think it’s useful to put the new AT&T in context, among the other large players it competes against. Here is the combined subscriber count for AT&T in the various retail categories it competes in (note that I’ve used retail wireless subscribers, which excludes connected cars, MVNO subscribers and other categories where AT&T isn’t selling directly to end users):ATT subscriber countsAs you can see, this is a formidable company at this point, with large numbers of subscribers across these different categories, with wireless by far the largest base. Verizon is the largest carrier by retail subscribers, with around 110 million, putting AT&T second, and far ahead of T-Mobile and Sprint. But in pay TV, AT&T is now the leader in both the US and the world, a dramatic change from its former position (note that “New Charter” represents the combined subscribers of Charter, Time Warner Cable, and Bright House following their merger, if successful):Pay TV subs post mergersThis combined scale, at almost five times AT&T’s previous standalone scale, is one of the two key benefits from the merger, and is something I’ll come back to below.

Cost synergies are significant, especially around content

The true definition of synergy is when two things come together and are greater than the sum of their parts, whereas the term is often used to mean cost savings that result when two things come together (indeed, AT&T talked up $2.5 billion of run-rate synergies from this deal, and that was entirely about cost synergies). However, AT&T also talked about the positive synergies that would come from putting these two businesses together, and they gave us some very interesting specifics around these.

On the cost synergy side, there are two major categories – content and operations. The content savings will come largely from the fact that AT&T can now leverage that combined scale in content buying – John Stephens (AT&T’s CFO) said during the conference that AT&T’s U-verse customers cost $17 per sub per month more for TV content than DirecTV’s customers. That obviously presents huge opportunities for reducing spend on content over time, and those savings make up a good chunk of the overall synergies. The other big chunk comes largely from consolidating operations across the two companies, getting to a single installation model and so on.

Revenue synergies could be far greater

However, to my mind the revenue synergies are much more interesting, and we got some interesting detail there too. AT&T broke out some of the cross-selling and up-selling opportunities as follows:

  • Of the 57 million households AT&T passes with its broadband service today, only 13 million have U-verse, and only about half could receive U-verse TV, whereas all 57 million could be sold TV now as part of a bundle from AT&T
  • 15 million households have DirecTV but aren’t AT&T Mobility subscribers, and so could be sold mobile services from AT&T
  • 21 million AT&T Mobility subscribers don’t take TV from either DirecTV or AT&T today, and so could be sold TV services
  • 3 million households in AT&T’s landline footprint have DirecTV but not AT&T broadband.

I’m actually somewhat skeptical of the benefits of a double play that simply combines TV and wireless, because it’s missing the broadband piece. As such, the two middle bullets there seem less compelling to me than the other two, which both involve a more traditional (and likely more appealing) bundle of TV and broadband. Landline/wireless bundles have never been popular, in part because they tend to offer small cost savings and little integration and in part because they make for very high monthly bills that many consumers would rather take in two chunks. In addition, the value proposition of a bundle that offers everything but broadband is not that appealing when customers still have to go to the local cable company for broadband, and are likely to pay more for it on a standalone basis than as part of a bundle. The reality is that the broadband/TV bundle is the one most people want to buy, and AT&T has good opportunities to cross sell these two products, and that’s the most interesting part of this to me.

Hints at new products and services

One of the most intriguing things to me was several hints from executives that new products, services, or ways of delivering existing services would be coming at some point in the future. Some of the things that were hinted at included:

  • Going over the top with a video service. There were several references to providing video over both managed and unmanaged networks, and the context was such that this didn’t seem to just be talking about TV Everywhere-type extensions to classic services. I’m very curious to see if this means we’re going to see either DirecTV or U-verse branded video services being sold to subscribers that can’t or don’t want to buy the traditional services from either company.
  • Providing optimized video services for AT&T Mobility customers. The implication here – especially given a comment about being in compliance with merger conditions – was that AT&T might offer its mobile subscribers some special access to U-Verse or DirecTV content, or possibly use the Sponsored Data model AT&T already has in place to provide zero-rated access to this content.
  • New business models for TV Everywhere authentication and sharing. There were lots of references to millennials using their parents’ pay TV login details to watch linear TV without their own subscriptions, and the opportunities to use the Mobile Share model to deal with this. That, to me, implied some sort of model under which TV subscribers would pay on some sort of per-device basis for additional streams, such that AT&T would monetize this sharing of credentials. I wouldn’t be surprised if we see more of this kind of thing from pay TV players and content owners going forward. However, TV Everywhere solutions already have a poor reputation for usability, and AT&T made portability of content a huge selling point today, so I’d expect them to tread carefully with this.

A realistic view of trends in TV

One of the things that was most refreshing about the AT&T executives’ comments during the morning was that they seem very much on top of the actual trends in the industry and not afraid of articulating them, even those that don’t necessarily bode well for traditional players. The excerpt below is from my on-the-fly notes (no transcript is available yet) based on John Stankey’s remarks on trends in the TV industry:

Pure play standalone offerings increasingly challenged. OTT will continue to grow and mature as a distribution alternative to managed networks. % of cord cutters, shavers and nevers will continue to grow. Premium content will migrate to OTT and skinny bundles. As these things occur, traditional TV advertising moves to other forms, pressuring content providers especially those with smaller audiences and less compelling content.

That seems to me both a decent summary of the trends and threats facing the traditional TV industry and a frank assessment of the implications. It’s good to see that AT&T isn’t in denial about all this (in contrast to some recent remarks from other players in the industry) and that it’s factored these trends into its projections for the combined business. In the Q&A at the end of the day, Randall Stephenson dealt with some questions on this and basically said that yes, pay TV was going to decline, but slowly, and that AT&T thought it could both grow fast enough to offset that market decline, and adapt its offerings so as to achieve similar profits off smaller TV bundles if necessary. That’s easier said than done, but given the details above about cross-selling and up-selling, it doesn’t seem too far-fetched, at least for the time being.

Two other quick notes

I don’t want to go into too much detail on this stuff, but a couple of other things were worth noting:

  • AT&T’s new advertising platform and products. AT&T has now combined its old AdWorks unit with the DirecTV advertising platform, and can offer both the scale of DirecTV and the local targeting capabilities of U-verse (and will use LTE where necessary to provide targeted advertising to DirecTV subscribers). It’s interesting to see both AT&T and Verizon investing in cross-platform advertising, albeit in very different ways (Verizon through its AOL acquisition).
  • John Donovan’s segment on AT&T’s technology platforms. John Donovan has been one of the best additions to the AT&T executive ranks over the last few years – he’s presided over a major overhaul of AT&T’s technology operations over the last few years, and that transformation is still going. During the conference, he talked through how AT&T is trying to match and then compound the benefits of Moore’s Law as it seeks cost efficiencies in network performance – it’s well worth a watch.

The new AT&T’s prospects

There’s so much more to talk about, and I haven’t even touched on AT&T’s Latin American strategy. But I just wanted to take a step back and summarize my view on AT&T as a company. I’ve said previously that when it comes to the mobile business, AT&T is the company most focused on what’s next. It began investing in connected cars, home automation, and a variety of other businesses years ago and is now reaping the benefits of its early start, capturing a significant share in connected cars in particular and driving significant net adds through that business. Even as the traditional phone business is saturating, AT&T is tapping into new growth areas better than its competitors, and that’s been important as its own traditional growth has slowed.

Today’s event, though, highlighted the fact that AT&T is still perfectly willing to compete in traditional areas too – the pay TV business in the US, and traditional phone services in high-growth markets like Mexico. Of course, that means exposing itself to some of those negative trends in TV, and Mexico is arguably just a few years behind the US and will eventually hit the same sort of saturation that the US has. However, in the US, its focus in the consumer market is going to be about putting together the different components of its offering in new and different ways. I expressed skepticism above about double play wireless-TV bundles, but I’m much more bullish about AT&T expanding its share of broadband-TV bundles in the AT&T footprint, especially as that footprint expands. At the same time, AT&T’s evolving technology foundation should give it the infrastructure it needs to pursue these opportunities with increasing cost efficiencies, while improving the end user experience. And on the business side, it’s continuing to build what’s arguably the strongest set of global assets for pursuing enterprise customers.

That’s a heck of a lot of moving parts, and there’s plenty of places for things to go wrong, but I’d argue that AT&T is easily the best positioned of the US carriers given its combination of assets and its strategy, and if it can execute well it should have a really good few years ahead of it.

Broadband, Cable companies, Cord-cutting, CST, TV, Video

An update on cord-cutting

The last of the major pay TV, broadband, and phone companies has now reported, so we have a pretty good sense of how the industry fared in Q2. As I do every quarter, I’ve put together a series of charts on the industry for subscribers to the Jackdaw Research Quarterly Decks service. As usual, there’s been tons of press about cord-cutting lately, but so often numbers that are bandied about only tell part of the story, so I wanted to provide an update with as much transparency as possible about where these numbers come from and what they represent.

A lot depends on what you measure

The reality is that this was a down quarter for the pay TV market, almost no matter how you look at it. Some of the numbers people report only provide a partial view, whereas I look at three discrete groups of companies in my reporting:

  • Major Public Players: The largest publicly-traded cable, satellite, and telecoms providers, a group that includes AT&T, Cablevision, Charter, Comcast, DirecTV, DISH, Time Warner Cable, and Verizon. These companies account for a large majority of overall pay TV subscribers in the US, but by no means all of them.
  • Public Players: A longer list of publicly-traded companies in those categories, which adds Cable ONE, Consolidated Communications, Frontier, Mediacom, Suddenlink, Windstream, and WideOpenWest to that list. This list gets even closer to covering the whole market, but is still not comprehensive. However, it doesn’t rely on estimates, and so is the most robust of the sets of numbers in its mix of comprehensiveness and foundation in actuals.
  • Public Players plus Cox and Bright House: That list plus estimates for two other companies: Bright House and Cox, the two largest privately-held cable companies, which don’t report their subscriber numbers publicly. I’ve used a combination of my own estimates and those provided by companies like the Leichtman Research Group to fill in these gaps. This longest list still isn’t utterly comprehensive, but accounts for the vast majority of US TV subscribers, though it relies on some estimates.

In the charts below, you’ll see these groups denoted as “big players”, “all players”, and “incl. Cox/Bright House” respectively.

A down quarter, no matter how you look at it

However, no matter which of these three groups you look at, it’s clear that the industry had a poor quarter, and arguably its second in a row. What’s important to note about this industry, however, is that it’s extremely cyclical, and the second quarter is usually the worst quarter of the year. As a result, I tend to look at year on year comparisons because that eliminates the cyclicality somewhat. The three charts below show net year-on-year changes in pay TV subscribers for the three groups described above:Year on year video adds big playersIf we look first at the “big players”, the trend is already obvious: year on year growth is well down on all the quarters in the past two years, albeit still marginally positive. But of course these numbers don’t include the smaller players, which often lose subscribers to the big ones. When we wrap those numbers in, we see the following:Year on year video adds all playersAs you can see, now we’re suddenly talking about a real decline year on year, and not just slowing growth. Those smaller players between them lost quite a few subscribers, and when they’re factored in we see a more complete picture. However, we’re still missing the two privately-traded companies, but based on past numbers and extrapolation we can add a reasonable estimate for them, too:Year on year video adds including Cox Bright HouseAnd now we see that this is not the first, but the second, quarter of negative growth for the industry. And you can also see that the trend started a year ago, as year on year net adds began declining then and have fallen every quarter since. Behind all this, though, is a series of interacting dynamics between the various groups of players in the market – cable companies, satellite providers, and telecoms operators. The results for these different groups are shown below:Year on year video net adds by categoryWhat you can see here is that the cable companies have actually been doing better over the past year or two, reducing their total net losses from 1.5 million to 1 million in that period, while the telecoms operators’ growth has slowed much more significantly, falling from 1.5m year on year to just over five hundred thousand. As the two major satellite providers have also seen a combined slowing of growth, the net result is that the industry has contracted for the last two quarters. There’s a little short-term stuff in here – last quarter AT&T focused on profitability in its TV base and actually saw a slight loss in subscribers, while Verizon’s marketing was constrained by its legal scuffle with content providers over its Custom TV bundles. So it’s possible we’ll see some recovery next quarter for the telecoms side of this business. But it’s increasingly clear that this is a zero (or negative) sum game, and that if telecoms gains do grow, they’ll likely come at the expense of the cable companies.

Household context worsens the picture

However, things can get even worse. The US population isn’t static, of course – the number of households is actually growing fairly rapidly, so that even static TV subscribership would mean falling penetration. Even the change from 2013 to 2014, when subscribers grew, represented a slight reduction – around half a percentage point – in penetration. And the last six months, with real year on year shrinkage, just accelerates that trend. We’re somewhere around 79% penetration at the moment, but it’s likely that this number is likely to fall by around 1% or so per year over the next few quarters. Cord cutting really is happening at this point, and it will only accelerate as more and more alternatives to the traditional pay TV bundle become available. That’s not to say it’s going to go to zero – there are still lots of barriers to adoption of alternatives, not least sports programming – but for many users, the alternatives are becoming good enough, especially as cable mainstays like HBO become available outside the bundle.

Broadband, Google, Google Fiber, TV

Google Fiber’s real innovation

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I’ve written about Google Fiber just once before, and that was to talk about my installation experience when I briefly lived in one of the very few areas where the service is available, in Provo, Utah. However, today I wanted to unpack something different about Google Fiber, in part in response to some recent articles I’ve seen, such as this one. These pieces often cite competition from Google as the major factor in a perceived shift in the status of broadband in the US, and that isn’t quite what’s happening. I would argue that Google has had a significant impact on the rollout of broadband in the US, but mostly not because of direct competition.

Maps tell part of the story

As I mentioned in that opening paragraph, Google Fiber is actually available in very few places today. Here’s the map from Google’s Expansion Plans page:Google Fiber map

 

The company being most aggressive currently with rolling out gigabit services is AT&T, and here’s its equivalent map:

Screenshot 2015-07-06 10.33.41

 

Note, first of all, that both companies have the same three categories – cities where they offer service today, cities where they will definitely launch in future, and cities which are in an exploratory stage. That’s something that we’ll come back to later.

But the second thing to note is that, of the 27 metro areas listed in total on the two maps, just seven appear on both maps, with the other 20 being mutually exclusive. Yes, you can absolutely make the argument that AT&T is responding to competition from Google in some of these markets, notably Austin (the same goes for some of the incumbent cable operators). But in a majority of cases, AT&T is launching or contemplating a launch in cities where Google isn’t present. So, though Google helps to explain why AT&T is launching gigabit service in some markets, it’s clearly not the whole answer.

Google’s real innovation: turning the model on its head

In what sense, then, is Google having a significant impact on the market? Well, the answer is that the key innovation Google brought to the broadband market has nothing to with technology and everything to do with business models. Essentially, it turned the traditional model on its head. If you’re not familiar with how broadband and TV operators usually roll out service, here’s how it’s traditionally worked. The provider approaches the municipality where it wants to offer service, and requests permission to do so. The municipality then extracts every possible concession from the potential provider before finally (if the provider accedes to the terms) granting permission. These concessions have typically included minimum coverage requirements, free access for schools, libraries and the like, carriage of local content on TV services, and so on. Essentially, providers have traditionally had to bribe municipalities with a variety of goodies just to get permission to offer service, and then have often still had to work very hard to get access to infrastructure needed to roll out the service.

Enter Google. Google’s process, of course, was entirely different: it essentially announced a competition for a city to become the first Google Fiber location, and invited cities effectively to bid for the privilege. What happened as a result was that over a thousand cities across the US applied, and Kansas City was eventually chosen. In the process, Google turned the usual model on its head – instead of municipalities extracting concessions from Google to roll out fiber, Google would extract concessions from cities for the privilege of having Google Fiber rolled out. Cities wouldn’t impose any “redlining 1” restrictions, they’d smooth the path for Google to build the necessary infrastructure, and so on.

The first reaction of Verizon and AT&T, which had just spent painful years getting franchises in many individual municipalities for their fiber rollouts, was outrage. However, their second reaction was far more productive, which was to say that they, too, would be willing to roll out such services if cities would offer them the same terms and concessions, starting with Austin, Texas, where AT&T was one of the incumbent operators. Though this claim was met with some initial skepticism, AT&T has since followed through not just in Austin but in a number of other cities where Google isn’t present at all. AT&T, then, has benefited enormously from Google’s business model innovation, which allows for a demand-led rollout facilitated rather than held back by local municipalities. And it’s this innovation which has allowed AT&T to rapidly expand its GigaPower services to many other cities too, well beyond those where Google is competing with AT&T. (Verizon, of course, had largely completed its FiOS rollout by the time these changes happened, and so wasn’t able to take advantage of them in the same way).

Rollout details

As I close, I’ll return briefly to something I asked you to note earlier – the three categories of cities both Google and AT&T list on their maps: open markets, announced markets, and markets under consideration. This is a critical part of this whole model, and the innovation Google brought to the market, because the markets under consideration are those currently being invited by the two companies to make big enough concessions to make a rollout worthwhile. The same process that got Google Fiber into Kansas City is now being repeated across the country by AT&T and Google in very much the same way.

What’s very different between the two companies, though, is the way they treat those first two groups, and Austin is a great case study of this difference. Google announced the Austin market in 2013, and now has one neighborhood (or Fiberhood, to use Google’s terminology) up for sale. Four other neighborhoods are listed as under construction, while “Rest of Austin” (the vast majority of land area in the city) is described as “coming soon”. Contrast this with AT&T, which made a rushed announcement within a week of Google’s, but completed its 1 gigabit rollout by September 2014. AT&T’s big advantage, of course, is that it already has a network and lots of customers in Austin, and in almost all the other cities where it will launch GigaPower service. This obviously dramatically speeds up the rollout, and in almost all cases will mean that AT&T is way out ahead of Google even in cities where the two compete. (In Austin specifically, the fact that AT&T owns a lot of the infrastructure Google needs access to for its rollout has been another significant factor).

Closely connected to this is the size of the cities these two companies are targeting – though Google has tended to focus mostly on second-tier cities in its early rollout, AT&T is already in Chicago, Miami, Atlanta, Dallas, and Houston, and has other major cities like LA, San Francisco, and San Diego on its exploratory list. Again, when you already have a network, contemplating a rollout in a major metropolitan area is much more palatable than if you’re having to start from scratch. So, AT&T’s launched cities see far greater availability more quickly, but its announced cities are also likely actually see gigabit services widely deployed far faster than Google’s.

So, in the end, though Google spearheaded this move to gigabit broadband, it’s quickly ceding the market to others, and especially AT&T, which are piggybacking off its business model innovation and rolling out services much more quickly. In the end, though, perhaps that meets one of Google’s original goals very effectively, and perhaps better than Google’s own rollout could have done. After all, one of the major drivers behind Google’s rollout was improving broadband access across the US.

Notes:

  1. Redlining is the name given to the practice of excluding certain neighborhoods from an infrastructure rollout on the basis of lower incomes, lower propensity to pay, or for other reasons, which has traditionally been banned by municipalities requiring universal access. ↩
Broadband, DISH, M&A, Satellite, T-Mobile, TV, Wireless

DISH T-Mobile makes sense except for broadband

The rumors of a DISH-T-Mobile combination make a lot of sense. This is the comment I sent to several reporters last night:

This deal makes perfect sense. Given the increasing consolidation in the market, T-Mobile and DISH were in danger of becoming the lone single-service providers left in the market, with everyone else combining TV, broadband, and wireless. T-Mobile has a growing subscriber base and network but not enough spectrum, while DISH has lots of spectrum and no network, so their assets are very complementary. This merger would also go some way to overcoming some of T-Mobile’s lack of scale compared to its larger competitors, AT&T and Verizon.

Ina Fried had a more colorful formulation of the same basic idea in her piece over at Recode:

A deal between Dish and T-Mobile is akin to two people who hook up because they are the last ones left in the bar at closing time.

I think there’s a lot of logic to the deal, and it also fits with something John Legere said on T-Mobile’s Q1 earnings call about the synergies between wireless and pay TV:

I have always said on consolidation, it’s not a matter of if it’s when and how and now I’m going to add and who, because I think as we think ahead you need to think I still reiterate that in five years we will think it comical that we thought about the industry structure as the four major wireless carriers and as I said before and as Mike says many times as content and entertainment and social are moving to the internet and the internet is moving mobile, these industries, the adjacent industries are in the same game that we’re in. So whether it’s what you see Google doing. What you see the social media companies is doing or as you start to see cable players trying to move content Wi-Fi integration with mobile network et cetera, these are individual customers that are looking at both offer sets. So I think you need to think about the cable industry and players like us as not competitors but potential partners and alternatives for each other in the future.

So I think once you broaden the definition of things and I think in my mind the fixed wire and home broadband industry is the one that was of a concern there, but when you start to broaden the definition as I said of content and entertainment and video going to customers on fixed and mobile devices together and you start thinking of that industry is a far more broad set of potential partnerships integrations and mergers that the United States could be looking at and in that case I think you will see consolidation of a much broader set.

I’ve been somewhat skeptical of T-Mobile’s Un-Carrier moves, as I’ve written about quite a bit here in the past, but there’s no denying it’s disrupted the industry and created some useful innovation for consumers. Now imagine that same attitude applied to the pay TV market, and things could get really interesting.

Broadband is the elephant in the room

However, I think the elephant in the room here is broadband. Yes, T-Mobile’s LTE network is growing all the time, but wireless networks simply aren’t an efficient way to deliver broadband to the home, especially if users are expecting to be able to stream video services at increasingly high quality. Even with the combined spectrum of the two companies, there’s no way they can provide the 100-200GB of monthly bandwidth many consumers are going to be consuming. So, T-Mobile and DISH together can provide a useful bundle of mobile voice and broadband together with pay TV, but if consumers want to use Sling TV or any other over-the-top video services, that combination isn’t going to cut it, and neither mobile nor satellite broadband technology is going to solve that problem any time soon. So that’s my biggest question about the merger. I’m curious to see how the companies plan to address this if they end up announcing something.

Importantly, AT&T-DirecTV faces to some extent the same problem, but AT&T does have broadband in a significant part of the US, so this is a regional, rather than national problem. So it’s not quite the same.

Broadband, Google, Google Fiber, TV

Thoughts on Google Fiber, from a user

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A few weeks ago,  I had Google Fiber installed at my home in Provo, Utah. Since there are still relatively few of us Google Fiber users out there, I thought I’d share some thoughts on the service from the perspective of a user. This is just a short summary of my experience. I’ve also posted a much longer, deep dive into the whole thing here.

First, the bandwidth side of things. The bandwidth is amazing, but only when you’re hard-wired into it. I get 700Mbit/s down and almost 600Mbit/s upstream pretty consistently when connected via Ethernet into the Network Box Google provides. It’s not quite the gigabit speed advertised, but it’s well over ten times the speed of any other broadband connection I’ve ever had. That makes for very fast iTunes downloads (I downloaded HD movies 3-4GB in size in 1-4 minutes and HD TV shows in well under a minute, and was able to upload a 1GB movie to Vimeo in about two and a half minutes. iTunes topped out at around 180-190Mbit/s, while Vimeo and Flickr seemed to operate at less than that (likely because of limits on processing speed at the other end).

However, all this falls apart somewhat on WiFi, which is what the vast majority of devices in the home will connect over. Right next to the Network Box (which also acts as a WiFi router) I get about a tenth of the download speed compared to being hard-wired, and about a third of the upload speed. Down in the basement, the speed drops further, and down a long hallway in my home office, the Google-provided router is completely useless. 60 feet away, the signal is so poor as to be unusable, and I’ve had to use my own router instead. That router provides 30-40Mbit/s up and down, which is OK but a far cry from gigabit speeds. And that’s a fundamental limitation of Google Fiber (and of WiFi technology) which dramatically reduces the utility on devices like tablets and smartphones, and on many other devices such as laptops which aren’t going to regularly be connected to Ethernet.

For most of what most of us use our devices for – web browsing, watching streaming video and so on – there’s going to be very little difference (at least today) in the experience on reasonably fast standard broadband and Google Fiber. And a 200Mbit/s connection would probably be about as fast as most online services could handle anyway. The other 800Mbit/s simply isn’t going to make a measurable difference.

As for the TV service, it’s totally fine for the basics, and has some clever features in the DVR and (as you might expect) search. But it’s also surprisingly un-Googley. The interface shares little design-wise with any of Google’s other services or platforms. There is no integration with other Google services such as YouTube, Google Play Music or Video and so on. And there’s no remote access to the DVR functions, which is particularly surprising in this day and age. In fact, the only way to control these functions is to be in the house, on the same network as the TV box. It seems odd for Google to be behind in the online/cloud aspects of running a modern TV service, but that’s where it is today.

The Google Fiber service doesn’t offer phone service, at least here in Provo. I suspect this is a regulatory issue, but it’s inconvenient to have to purchase voice separately, especially since landline-class VoIP services sold separately are going to be tied to the one place in the house where you can hardwire a terminal adapter. This was potentially an opportunity to do some interesting things here with Google Voice and so on, but Google seems to have decided the regulatory headaches weren’t worth it.

So what does all this mean? A couple of things. Firstly, the rush to gigabit speeds feels a bit premature, somewhat validating the more slow-and-steady approach we’ve seen from the incumbent players. Yes, we’re going to need increasing amounts of bandwidth over the next few years to support our growing demand for HD and eventually 4K video, but other than that it’s hard to see the applications that drive the need for gigabit speeds as opposed to 50Mbit/s or even 200Mbit/s. Secondly, Google Fiber still feels very much like an experiment, and one that’s disconnected from much of the rest of what Google does. That limits its effectiveness in some ways, and reduces the chances we’ll see Google do something really disruptive on a significantly larger scale. Lastly, WiFi is a big barrier to making these sorts of speeds meaningful in real life: once you get over about 30Mbit/s, most people’s WiFi routers are not going to be able to pass on the benefits to most of the devices in their homes. Future WiFi variants will help with this, but it’ll be a long time before gigabit speeds can be tapped by the devices most of us use most: smartphones and tablets.

Broadband, Google, Google Fiber, TV

Thoughts on Google Fiber, from a user (deep dive)

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A few weeks ago,  I had Google Fiber installed at my home in Provo, Utah. Since there are still relatively few of us Google Fiber users out there, I thought I’d share some thoughts on the service from the perspective of a user. This is going to be a fairly long post, which I’m going to break up into several sections:

However, if you’d like the short version, you can go here.  Continue reading →