Fiber to be a profitable business, not a tech experiment, says Google

Credit: CNET/Marguerite Reardon

With Google Fiber promising 1Gb speeds for $70 a month – a dramatically better deal than anything else currently available in the USA – there had been a pretty widespread assumption that it was a tech experiment on Google’s part, to see what kind of services could be offered on a really high-speed link, rather than a money-making business. But not so, says a Google Fiber exec speaking at a Fiber-to-the-Home Council meeting covered by CNET …

Milo Medin, vice president of access services for Google, told an audience of city planners, engineers, and city mayors that Google is not just building a testbed for new Google services in Kansas City with its Google Fiber project, but an actual business that the company hopes will one day be profitable.

“We expect to make money from Google Fiber,” he said. “This is a great business to be in.”

Medin did confirm this wasn’t always the expectation. “We thought a handful of cities would say they were interested. Then we saw that 1,100 communities replied. No one at the time thought there was a real business here. But that changed when we saw the interest.”

Part of the secret to being able to offer a profitable service at such a low cost, revealed Medin, is by asking city authorities to help the company keep costs down. Google asks to make use of existing cable conduits, for poles to be installed where conduits don’t exist and for dedicated inspectors to be on hand so there are no delays waiting for approval of any construction required.

Medin also issued an important warning for anyone wavering about whether or not to sign up: you may only get one chance.

He warned that once Google completes one wave of installation in a particular fiberhood, it’s done. And the company starts again in another fiberhood. The downside, of course, is that customers who don’t sign up right away may lose out on the chance to get the service.

“If you miss out on that installation, we may not get back to you for a long time,” he said.

Google Fiber’s next stop after Kansas will be Austin, Texas.

The question is: If Google can make money giving people 1GB for $70/month why can’t the incumbents?