For a long time, Google Fiber was the most exciting US broadband provider out there. Cities wanted it; tech people drooled over it; and, on a loftier level, it even promised to help bridge the “digital divide” between rich and poor. But now, things are looking bleak: Yesterday, Bloomberg reported that Google Fiber is being scaled back dramatically (again) as it named Greg McCray its new CEO, with “several hundred” of its employees in that division being sent to other areas of the company.
Google Fiber, part of the Access division of Google’s parent company Alphabet, was launched in 2010 in Kansas City, providing gigabit broadband and TV services over fiber optic cables. Gigabit broadband is 40 times faster than the 25mbps speeds required to be considered broadband. Over the next seven years, it expanded to eight other US metropolitan areas, including Austin and Salt Lake City. Then, in October 2016, the company announced it was pausing Fiber expansion into its “potential fiber cities” and cutting staff. This week, even more staff are gone. What changed?
Part of the problem is simply that expanding fibre broadband was always going to be a massive undertaking, and was always going to face some big hurdles. Laying kilometres and kilometres of cables takes time and money — and as one Alphabet employee told the Wall Street Journal last year, “Everyone who has done fiber to the home has given up because it costs way too much money and takes way too much time.”
As Wired pointed out, the big problem is connecting existing fibre cables to people’s homes, which is “hellishly expensive”. It’s partly just a physical problem — if a new broadband provider wants to set up in a city, it has to connect each home it wants to serve to their network, which means a whole lot of wires. But it’s also a regulatory hurdle, particularly regarding something called “pole attachment” — literally the physical process of attaching wires to telephone poles, which is regulated by local government. When a new provider wants to attach their wires, each provider with wires already on the pole has to send a technician to move its wires to make way for the new one.
What that means is, as Christopher Mitchell, director of the Community Broadband Networks Project at the Institute for Local Self-Reliance told Gizmodo, “the new guy gets screwed.” Google Fiber complained in a blog post last year that it had only been able to upgrade 33 telephone poles out of 88,000 in Nashville, thanks to these rules. Google has pushed hard to promote a different policy, known as “one touch make ready”, which would allow a single provider to make all those changes in one go.
But that hasn’t been plain sailing either, with incumbent US providers like AT&T and Charter filing lawsuits left and right in cities that adopt the policy. AT&T’s complaints with the policy have ranged from Google providing inaccurate information on poles, to saying it could lead to service disruption if there are mistakes, to objecting that it would allow changes to poles they own “without AT&T’s consent and with little notice”.
It isn’t that Google doesn’t have the money to fight these things, but it might not have been worth the resources to try and seriously compete with an incumbent provider on this issue — particularly when those providers are already so entrenched in the policy scene. In Tennessee, AT&T employed five times as many lobbyists as Google did last year — 25 to Google’s five.
Another problem that’s faced Google Fiber: Convincing people to sign up. According to Mitchell, while customers love the super fast speeds once they get them, it’s often hard to convince people to switch “even from a provider they hate”, because they don’t have time to wait at home for installation or spend time on the phone with their provider. Switching is a pain in the arse, basically. While adoption rates have been high in middle- and upper-class areas, low-income areas haven’t adopted Google Fiber as fast.
For now, it seems Google is turning away from fibre and towards wireless options to solve the last-kilometre problem. Last year it acquired Webpass, which provides speedy wireless internet in six metro areas in the US. These fixed wireless systems provide internet to multi-unit buildings (like apartments or businesses) — essentially taking the super-fast internet from fibre-optic cables and beaming it wirelessly, rather than having to run a cable to every building. It announced last year that projects in upcoming cities like Dallas and Los Angeles would be wireless. These wireless networks still need cables in the ground to work, but a lot fewer of them — and it’s a lot cheaper. Google is also deploying cables with a technique called “microtrenching” — essentially digging very shallow trenches to lay cables, which is again easier and cheaper than digging deep holes.
A Google spokesperson provided the following statement to Gizmodo:
“Google Fiber remains committed to our customers and cities. We want to bring Google Fiber to customers faster, so we’re focused on making deployment more efficient and less intrusive. We’re thrilled that Greg has agreed to join as CEO, to drive this innovation and to grow the business.”
But that leaves the question: Why is this shift happening now? A former Google Fiber employee told Gizmodo that he was surprised by what’s happening and that the company perhaps shouldn’t have been so thrown by incumbent providers like AT&T’s attempts to slow them down, saying these providers “always tried to block the process, which is why Google had spread itself out across a small number of metro areas. These are not new issues.”
Ultimately, for all the Silicon Valley talk of values and the benefits of expanding high-speed broadband, it’s likely that Google’s reasoning lies at least partly in a calculation about profitability. Fiber was always one of Google’s “other bets”, which are just that — bets, not guaranteed to pay off. Google is happy to keep sending its Project Loon internet balloons into the sky, announcing a breakthrough in deployment today, but it’s suddenly less committed to laying more cables in the ground. Was the focus on deploying this infrastructure just no longer worth the hassle and cost of fighting these protracted battles with incumbent internet providers? With the company seemingly seeking to get more serious about some of its “pie-in-the-sky” bets, maybe those big investments in laying the cables just didn’t seem worth it when the wireless alternative is right there.