Market Forces Doom Google’s Loon Internet Access Project

It is a mistake to think that the only thing preventing rural areas from getting broadband internet is an unwillingness in the private sector to build the necessary infrastructure. It is easy to blame broadband providers for not going that extra mile, but reality is far more complicated than that. Exhibit A in this regard is Google Loon, an ambitious project launched by Alphabet a decade ago and permanently shuttered in early 2021.

Loon failed for one simple reason: it did not possess market sustainability. The same goes for Google’s Station project. Its ambitious goals included giving internet access to billions of people through local railroad stations. It was also permanently shuttered.

Google is not alone in its failure to bring internet access to the underserved. Facebook has its own canceled project in Aquila, a program originally started to compete with Loon. It was grounded in 2018. Meanwhile, Facebook’s hasn’t provided anyone with legitimate internet access. Rather, it provides people with basic access an entry point to a small suite of websites Facebook allows them to see.

1.Tennis Court-Sized Balloons

Getting back to Google and Loon, the project’s goals included building self-navigating balloons the size of tennis courts. Balloon platforms were outfitted with the equipment necessary to provide wireless internet access in rural areas. It is assumed the equipment ran on a combination of batteries and solar power.

Had Google realized its dream, it would have had an aerial flotilla of balloons floating around the atmosphere. But alas, they couldn’t make it work. The technology was certainly there, but the project was too expensive. Google could not get operating costs down low enough to make going full throttle financially viable. In simple terms, the market would not support their ambitions.

Google claimed that its target audience, citizens in underdeveloped nations, were unwilling to purchase the 4G phones necessary to access Loon. Some of them didn’t want the phones while others simply didn’t care about the internet. Imagine that! People who don’t care about the internet.

2.ISPs Aren’t Wrong After All

Watching Google’s failed attempts to bring balloon-based internet access to underdeveloped nations is proof positive that ISPs are not wrong after all. Yes, the U.S. is among the most developed countries in the world. Yes, there are still people living in rural areas without access to wired broadband. But that doesn’t change the fact that building broadband infrastructure is expensive. It’s cost prohibitive in rural areas where there aren’t enough customers to support it.

If Google and Facebook cannot justify the costs of developing wireless internet, why would we expect anything different from broadband providers we just assume should be willing to invest millions in new infrastructure? Extending broadband infrastructure does not make a lot of sense from a financial standpoint.

On the other hand, tapping into existing 4G cellular networks is both doable and profitable. Houston’s Blazing Hog is just one company offering 4G LTE rural internet. The technology is already there thanks to smartphone proliferation. And with 4G and 5G providers falling all over themselves to stay ahead of the competition, there is no reason to believe that more infrastructure will not be built.

Market forces doomed Loon from the start. They doomed Station and Aquila, too. Market forces are even keeping wired broadband out of rural America because ISPs cannot justify spending the money to build. But that just gives companies like Blazing Hog an opportunity to make cellular technology work for internet access. They are succeeding because the market is strong. Therein lies the difference. Blazing Hog is tapping into the market while Google tried to create it.

By May J. Rayner

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