Google’s Actions Hurt Broadband Rollout, Particularly in Rural America

Lack of relevant content, affordability and digital literacy are the three dominant barriers to the adoption of broadband, according to the World Bank Broadband Strategies Toolkit. The Google Apps Partner Edition™ platform addresses these barriers as it is a relatively low-cost, email/communications/productivity/device management platform. The Google platform has become a platform trusted by tens of millions to manage the cyber aspects of their businesses and their lives, including this publication which has used variations of it since late 2006.

A recent decision by Google that unilaterally changes the way it deals with ISP partnerships jeopardizes that trust, while putting up new barriers to broadband and have some suggesting that Google’s actions are at the heart of the issues that have been brought forward in the Senate Judiciary Committee Net Neutrality hearings. Assuming the ISPs can continue with some variation of the existing program, the approximate ten times cost increase cost makes cable programming price hikes trivial by comparison.

A Brilliant Partnership Strategy

An ISP brochure featuring the benefits of Google Apps.
An ISP brochure featuring the benefits of Google Apps Partner Edition.

To help drive adoption of its platform, Google engaged ISPs and Communications Service Providers, many of which are non-profit, member-owned entities, to be value-added resellers of their Google Apps platform. These operators transitioned their customers from self-hosted or third-party email solutions to the Google Apps platform.

This approach of working with local partners allowed Google to focus on creating and keeping the platform relevant, as indicated in this post from this 2007 Google Blog post by Google product manager, Hunter Middleton:

“From the beginning, we envisioned making Google Apps available to any organization that might want to offer this innovative set of services to its employees, customers, students, members, or any other associates of the organization. Today, we’re excited to take another step in that direction by releasing a version of Google Apps specifically designed for ISPs, portals, and other service providers, whether you have a few thousand subscribers or over a million. This new version, which we’re calling the Partner Edition, makes it easy for large and small service providers to offer your subscribers the latest versions of powerful tools, like Gmail, Google Calendar, and Google Docs & Spreadsheets, without having to worry about hosting, updating, or maintaining any of the services yourself. All you have to do is point and click in the easy admin control panel and figure out what branding you’d like to layer on top of the products in order to create a customized look and feel. You can quit spending your resources and time on applications like webmail — and leave the work to our busy bees at the Googleplex.”

And the strategy worked, as hundreds of ISPs, representing what some estimate to be approximately one million subscribers signed up. By being able to private label the service, the ISPs could offer their customers state-of-the-art, ad-free email, contacts, chat, calendars, online documents, photos and more at an affordable price without having to maintain a costly infrastructure. BEVCOMM”s CEO Bill Eckles stated how it made a difference to his company and  community:

 “BEVCOMM has been using their [Google’s] platform through a 3rd party integrator for a couple of years.  We switched from managing our email platform in-house to Google’s platform because of their reputation for being incredibly reliable.  As a very small company we simply didn’t have the resources to manage a platform ourselves with the reliability people demand from email.”

With Google focusing on software, the ISP’s could focus on educating customers on how to use the many features inherent in the Google Apps products. These customers included not only residential, but schools and small businesses who appreciated the assistance that only an operator with local presence can provide. These ISPs essentially serve as the local, outsourced IT staff, freeing up resources of the small businesses to focus on their services and products.

In an email exchange, Kurt Gruendling, VP of Marketing for WCVT, a family owned, Vermont rural communications company explained how he and his colleague taught classes to more than 1,000 customers:

“I’m a big advocate for the platform and I think the Google Apps platform is very powerful and have spent a considerable amount of time teaching “Google School” classes to our customers many of whom would have never used Google Apps.  We have taught over 50 on site classes and webinars throughout our territory over the past 18 months with more than 1,000 customers attending and leading them to the value of the core services in the platform that go way beyond mail.”

Kurt Gruendling teaching how to use Google Apps to rural customers
Kurt Gruendling teaching rural customers how to use Google Apps.

In addition to its investment in marketing and training, the ISP pays Google for the ongoing cost to maintain the service. The costs are variable, which is a benefit to the ISP, as they don’t have to make large upfront investments in servers and software. This allows the ISP to focus on providing higher-speed and more reliable bandwidth to their customers by bringing fiber deeper into the last-mile network, which is important for the cloud-based, Google Apps platform. Ironically, many of these rural operators deployed Fiber to the Home (FTTH) bef ore Google’s move into that business in certain urban markets, such as Kansas City, Austin and Provo.

For those operators that were too small to deal directly with Google, at least two Google Apps Partner Edition™ integrators emerged to help; Ikano and NeoNova, a subsidiary of the National Rural Telecommunications Cooperative. These aggregators not only helped the operators, but they helped get the word out about the Google Apps Partner Edition™ and aggressively marketed it and successfully signed up ISPs throughout the country, such  as the aforementioned WCVT

10X Increase in Cost – If You Can Get It

Things were going swimmingly for the operators and their customers, then, in early 2014, operators found out that Google has plans to significantly alter its relationship with ISPs in 2015. This was a surprise and is causing operators to scramble to come up with alternative solutions. The solutions aren’t going to be simple or inexpensive, however.

One person commenting with a Google Forum suggested that he sees the following alternatives as summarized below:

  1. Audit our email accounts to reduce the number as much as possible. Migrate the accounts to Google Apps for Business, which would be about 10 times the cost [from $0.35 to approx. $3-$4 per month that this operator is currently paying Google] per email account. Pass this cost on to consumers and prepare for a backlash.
  2. Migrate to another solution

Based on comments from operators both in private exchanges with this author and on the aforementioned Google Forum, it is unclear whether Google Apps for Business will even be available to all ISPs.

The increased cost cited above actually is much higher on a per household basis, as the costs are on a per email account basis, so the cost to the ISP for a typical residential broadband account with 5 included email accounts would jump to $16.50 per month.

The other alternative is to switch providers. There are rumblings that some providers are looking at alternatives, such as Atmail (which interestingly just opened a U.S. office), [added 10/16/14] Hyperoffice, Microsoft Office 365, [Added 10/17/14] OX, Zimbra or Zoho. Still, there are concerns about the migration and, as WCVT’s Gruendling points out, it isn’t clear whether all of a customers “paid for” content will successfully transition, as there isn’t a one-for-one replacement for Google’s excellent product.

“There is a date when Google will delete end-user data, including documents, pictures, videos and paid-for content.”

An ISP promoting Google Apps with a prominent place on their web site.
An ISP prominently promoting Google Apps on its web site.

In addition to the higher direct ongoing costs that, in the end, will be passed on to the consumer, there will also be the costs associated with making the transition. One forum commenter suggesting it could take 1 to 2 staff to focus on the transition. This is a real opportunity cost for operators with a small staffs and it means they have fewer resources for helping customers and building their broadband networks.

Bill Eckles, CEO of MN-based, rural telecommunications provider, BEVCOMM, suggested that experience suggests the transition will be challenging:

“Now that Google has decided they don’t want to maintain this program we are going to be forced to move all of our customers. The markets BEVCOMM serves are generally more rural and less affluent than [those served by] larger companies.  Every time we switch email platforms it is a major undertaking trying to support our customers through the move.  The last time we switched platforms 3,000 email customers opted to switch to another option not offered by BEVCOMM.”

It will be a hassle for the consumers, as it will mean reconfiguration of mail clients on PCs, phones and tablets. Special care will be necessary for the ISP’s business customers who are dealing with confidential information and regulatory compliance issues (e.g. HIPAA).

And since this transition includes documents, photos and paid-for content, it will be even more complex than the transition that the ISPs made to move their existing email systems to Google’s platforms. And many of these providers are still recovering from that move, which, for some, occurred less than a year ago.

Google – Rural America Is Calling

In a letter to Senator Leahy, WCVT characterized this as an issue of rural/urban and big/small and that the conversation will cause a multi-million dollar support issue that will affect the operators, as well as Google.

Bill Eckles of Bevcomm reinforced WCVT’s comments when he stated in an email:

“Switching email platforms is a major disruption for our customers, who really at the end of the day are Google’s customers. As far as I know Google didn’t even bother asking for input from any of the companies who are offering their email.  This experience has really shown Google doesn’t seem to care about rural consumers.”

A WCVT service vehicle in rural Vermont about to cover a historic covered bridge.
A WCVT service vehicle in rural Vermont about to cover a historic covered bridge.

One of the big frustrations for the ISPs is that they haven’t been given a reason the program, which these  ISPs want to keep, is being unilaterally changed by Google. They have made suggestions for compromise solutions, but have been unable to discuss with any of the Google staff responsible for the offering.

This action also seemingly runs counter to Google’s initiatives to make broadband ubiquitous, as its ISP partners are deploying Fiber to the Home in rural markets where Google will not be able to reach with its last-mile, fiber network.

WCVT, in its letter to Senator Leahy, provides a voice to its rural ISP brethren with its desire to meet with Google.

“We are requesting a meeting with Google decision-makers with authority and vision to establish a reasonable course of action. We need the chance, on behalf of our consumers, to sit down and discuss the impacts of this decision and to seek to work with Google to find alternative solutions rather than just having the plug pulled on us.”

These providers want to work with Google and one service provider holds out hope that those who came to rely on Google to provide critical content for their broadband networks will be able to come up with a solution that works for all parties:

“There has to be a better solution. We are committed to working with Google and hope that they don’t turn their back on rural America.”

[Editor’s Note: At the time of publication, Google has not yet provided an official response to this article, explaining why they changed the Google Apps Partner Edition™ program.]

[Added 03/25/15 & 10/16/14] Links to exclusive ViodiTV interviews with operators discussing the impact of Google’s actions on their operations and their customers:

Catherine Moyer, GM of Pioneer Communications, discussing their use of Google Apps at the 2014 NTCA Fall Conference.
Donnie Miller explains how Pioneer Telephone was blindsided by Google.
Catherine Moyer, GM of Pioneer Communications, discussing their use of Google Apps at the 2014 NTCA Fall Conference.
Catherine Moyer, GM of Pioneer Communications, discusses the impact of Google’s actions.
Kurt Gruendling of WCVT displays the Smart Rural Community road sign symbolizing the award his company received from NTCA at their 2014 Fall Conference.
Kurt Gruendling, WCVT VP of Marketing and Business Development discusses impact of Google’s actions.

0 thoughts on “Google’s Actions Hurt Broadband Rollout, Particularly in Rural America

  1. I believe there is another Google endeavor, Project Loon, which delivers broadband using balloons is also a real threat that virtually no one in the tier three market is looking at. They are currently testing it in rural California and Nevada. I would not be surprised that if Google advances with this project they will offer it for next to nothing because the data they get will be invaluable to them in selling Google to their advertisers. Check out “Project Loon” on their website.

    1. Thanks Scott. Here is the link to Project Loon:

      http://www.google.com/loon/

      and a link to their expansion of their testing to California and Nevada:

      http://www.pcworld.com/article/2145500/exclusive-googles-project-loon-tests-move-to-lte-band-in-nevada.html
      and a summary of how aerial drones might play into a wireless broadband solution for rural areas:

      http://stevencrowley.com/2014/09/15/google-files-confidential-application-with-fcc-for-drone-test-in-new-mexico/

      Whether intentional or not, Google’s removal of its product that so many ISPs and their customers have come to rely on, would hurt those same ISPs ability to react to competitors (e.g. the opportunity cost of changing a core part of their business).

      As you point out, Google could become a formidable competitor to these same ISPs with Project Loon, so, intentionally or not, it doesn’t reflect well on Google.

  2. Very disappointing. Google was providing an invaluable service to a large percentage of rural america, and now it’s pulling the rug with no explanation. Seems counter to its motto of “Don’t be evil.”

  3. Ken, thank you so much for referencing HyperOffice. I would like to welcome ISPs and other service providers looking to switch off Google Apps for ISPs. Here are some reasons:

    – We are 100% focused on enabling ISPs

    – We have a proven email plus solution, with a modern UI, mobile access, and additional features like calendars, contacts and documents

    – We offer you end-to-end migration services to help you move your accounts over.

    – You get very aggressive license pricing

    – You have the ability to brand the solution and launch it under your own domain.

    Again, you can find more information at http://www.hyperoffice.com/sp/google-apps.php

  4. Are there any updates from Google on this story? I am a former customer of one of the affected ISP and don’t have a clue as to how to transfer and notify.

    1. Hi James,

      Thanks for the comment. Unfortunately, although I had conversations with several people at Google, I never received an official response to this article or why this decision was made.

      What I have heard and read is that the transfer process hasn’t been easy for the ISPs.

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