Rise of the GoogleNet

How Silicon Valley is making the Internet faster and cheaper.
Posted December 18, 2013
By

Mike Elgan


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The telecom industry’s old strategy of barely keeping up with the public’s demand for faster, cheaper Internet speeds (while simultaneously trying to suppress that demand) is dead. And good riddance.

Now it’s all they can do to keep their biggest customers -- Google, Facebook, Microsoft, Amazon and others -- from taking control of their business.

Comcast executive vice president David L. Cohen wrote an op/ed piece for the Philadelphia Inquirer in May, which asserted that the US is a “world leader” in broadband speeds. In that article, Cohen made the case that the United States is so far ahead on broadband speeds that consumers don’t really want faster speeds.

Cohen wrote that “By nearly every measure, we are a world leader” in fast Internet connectivity.

He then laid out a tortured and transparently misleading case, comparing the number of Americans with access to fast broadband to “Europe.”

Some countries in Europe, such as the Netherlands, Sweden and Denmark, offer average connectivity speeds exceeding 2.8 Mbps (with the Netherlands averaging 3.16Mbps), according to a recent report by Netflix. But Cohen’s “Europe” includes broadband laggards like Italy and Greece. (Netflix pegged the United States in the bottom three with Ireland and Mexico.)

The idea that the United States -- the original creator of the Internet and home to Silicon Valley -- should be happy with Internet speeds not as fast as Europe’s fast countries, but as fast as an average of Europe’s fastest and slowest countries -- is condescending and delusional.

Half of US bandwidth is consumed by rapidly growing YouTube, and one third by Netflix. Does anyone believe video is fast enough? Gimme a break.

There’s a difference between not wanting faster speeds and not wanting to pay $200 per month for faster speeds.

Cohen even had the gall to take credit for Silicon Valley, saying that “Global leaders like Google, Facebook, Apple, Twitter, Pandora, and hundreds of others got their start thanks to the trillion-plus-dollar investment by broadband providers that has crisscrossed this nation with robust and truly ubiquitous broadband connectivity.”

That’s just a positive spin on the fact that during the dot-com bubble of the late 90s, telecoms expressed their irrational exuberance by over-investing in fiber capacity -- the source of the plentiful dark fiber available today. (Dark fiber is fiber optic cable that has already been laid, but isn’t being used. It’s called “dark fiber” because fiber that’s actively used is called “lit cable.”)

Google has been so stymied by the Comcasts of the world that nine years ago they had to gain control of thousands of miles of fiber cables in order to route around the “broadband providers.”

The Rise of Google’s Fiber Internet

Way back in January 2005, a columnist for a publication called Light Reading discovered a Google job listing for a “Strategic Negotiator for Global Infrastructure.” The job description involved the “identification, selection, and negotiation of dark fiber contracts both in metropolitan areas and over long distances as part of development of a global backbone network; contracts and negotiation for managed metropolitan services and long haul wavelength services to fulfill capacity and redundancy requirements in North America, Latin America, Asia, and Europe."

Rumors spread about a coming parallel Internet infrastructure, that for a while pundits called the "GoogleNet."

In fact, Google was just looking for someone to go shopping for dark fiber.

Fast forward to today, and Google controls more than 100,000 miles of fiber globally. By comparison, Sprint controls less than 40,000 miles.

Facebook has been investing heavily to light up some dark fiber of its own, and both Google and Facebook are even laying undersea cables in Asia and elsewhere. Microsoft and Amazon are also investing massively.

There are many reasons for these investments. In some cases, they want to boost performance by connecting their data centers to Internet backbones. In others, they want to drive down costs and overcome bottlenecks in the system.

Together, Google, Facebook and other major customers of the telecoms are increasingly viewed by the industry as competitors, according to a recent article in The Wall Street Journal.

Google has gained so much power since 2005 in the negotiations to control dark fiber, for example, that it pushes aside the telecoms’ normal contracts and hands them their own Google contract with a no-negotiation, take-it-or-leave-it proposal, according to the article.

Telecoms feel like they’re losing control. And that’s a good thing.

If you compare companies like Google and Facebook -- call them advertising-supported content movers -- with telecom companies, you can see how their incentives and priorities are opposites.

The advertising-supported content movers profit more when Internet bandwidth is super fast and ultra cheap. The telecom companies profit more when Internet bandwidth is slow and expensive.


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Tags: Google, Web, Internet, Silicon Valley


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