Google Fiber Leaves Louisville As Alphabet Retreats From Telecom

from the not-the-revolution-that-was-advertised dept

When Google Fiber launched in 2010, it was lauded as a game changer for the broadband industry. Google Fiber would, we were told, revolutionize the industry by taking Silicon Valley money and disrupting the viciously uncompetitive and anti-competitive telecom sector. Initially things worked out well; cities tripped over themselves offering all manner of perks to the company in the hopes of breaking free from the broadband duopoly logjam. And in markets where Google Fiber was deployed, prices certainly dropped thanks to Google Fiber market pressure. The free marketing courtesy of press coverage was endless.

That was then, this is now.

In late 2016 Alphabet began getting cold feet about the high costs and slow return of the project, and effectively mothballed the entire thing — without admitting that’s what they were doing. The company blew through several CEOs in just a few months, laid off hundreds of employees, froze any real expansion, and cancelled countless installations for users who had been waiting years. And while Google made a lot of noise about how it would be shifting from fiber to wireless to possibly cut costs, those promises so far appear stuck in neutral as well.

Meanwhile, Google Fiber’s fiber network continues to shrink. Last week, the company penned a blog post stating it would be cancelling its entire build in Louisville, Kentucky. According to the post, the company experienced what it’s calling some “challenges” that have forced it to retreat from the city after spending the last two years deploying fiber:

“When we launched Fiber service in Louisville in October 2017, we noted at the time that it was the fastest we?ve ever moved from construction announcement to signing up customers. That?s because we were trialing a lot of things in Louisville, including a different type of construction method ? namely, placing fiber in much shallower trenches than we?ve done elsewhere. Innovating means learning, and sometimes, unfortunately, you learn by failing. In Louisville, we?ve encountered challenges that have been disruptive to residents and caused service issues for our customers.”

Google Fiber doesn’t come out and say this in its blog post, but part of the company’s challenges in Louisville were thanks to AT&T, which sued Louisville in a bid to prevent it from using city utility poles, about 40% of which are owned by AT&T. The city passed an ordinance requested by Google that would have sped up utility-pole attachment, then had to spend $300K to defend itself from AT&T. AT&T ultimately lost that suit, but not before Google Fiber was forced to shift tactics and embrace a practice called “microtrenching,” which involves burying fiber a few inches below the road.

If you check out the link Google Fiber links to, you’ll notice that this didn’t go particularly well in Louisville, either because of substandard contractors or substandard sealant materials used to cover up the fiber post burial. Normally, a company dedicated to a business model and a community would just go back in and pony up the cost to repair the flawed installations. But given Alphabet and Google Fiber’s clear disinterest in their once-promising business, Google Fiber instead chose to simply give up:

“We?re not living up to the high standards we set for ourselves, or the standards we?ve demonstrated in other Fiber cities. We would need to essentially rebuild our entire network in Louisville to provide the great service that Google Fiber is known for, and that’s just not the right business decision for us.”

To be clear, Alphabet executives knew very well that disrupting an entrenched monopoly-dominated business model and building a nationwide fiber network would be expensive and time consuming. But to also be clear, the Alphabet and Google of 2019 is far from the Google of a decade ago that first built this plan. Modern Google/Alphabet is far less interested in disruption and far more interested in legacy turf protection (witness its abrupt about face on net neutrality, for example). As we’ve seen on countless fronts, this simply isn’t the same Google it once was.

And while it’s perfectly fine that the company lost its nerve to fund a toe to toe battle with the entrenched and broken broadband industry, its refusal to simply admit as much is annoying impacted communities. Google Fiber PR folks are engaged in a lot of language about how they’re “still dedicated” to the project, despite the fact it has been effectively mothballed. And while Google may eventually successfully pivot to wireless, it seems just as likely that the entire project is chopped up and sold in a few years. Likely to one of the incumbent providers Google Fiber and Alphabet once promised to disrupt.

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Comments on “Google Fiber Leaves Louisville As Alphabet Retreats From Telecom”

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35 Comments
hij (profile) says:

Georgia still trying

Google said it was going to be available in Atlanta but never did anything other than pay for nice television ads. Now in Georgia, the state legislature is trying yet again to do something that will increase access to broadband in rural areas. They tried last year but gave up because they could not past AT&T’s heavy handed tactics. Now they are trying to promote local electric utilities to provide internet.

Anonymous Coward says:

This should be no surprise to anyone familiar with standard Google practices. They’re widely known for trying something out and then killing it shortly after if it didn’t turn out to be a big money maker. They do this all the time.

That’s not necessarily a bad thing. In fact, it’s smart business to bail out of a losing proposition before the losses stack up too high. But a company known for this behavior should not have gotten involved in becoming a utility or any other sector that requires long term commitment. Because they did they’re just jerking customers around and creating ill will toward themselves.

Rocky says:

Re: Re:

Actually, Google did some good with the fiber rollout – but it was secondary effects, it spurred some investment into infrastructure and lowering of prices from the entrenched ISP’s.

Also, Google plowed billions of dollar into laying fiber which tells us that if you spend billions of dollars you still can’t really compete with the entrenched ISP’s.

any moose cow word says:

This is precisely why there’s rarely any meaningful competition when building extensive physical infrastructure is required to enter a market. The aberration of the current broadband duopoly only exists because cable companies weren’t competing with existing phone service when they strung out their original networks, often across the phone company’s poles and trenches. If a company as big a Google can’t enter the market, who will? No one who answers to executives and investors will make that kind of long-term investment.

Gas, electric, water, roads, etc are all monopolies and are regulated as such. Most countries already know that wired communication networks are monopolies too. The US needs to get over the childish idealism of the "free market"; come to grips of the cold hard reality that infrastructure is going to be a monopoly, whether private or public, and regulate it as such.

gilby says:

Re: Re: Re: Re:

Most locations have multiple entities with existing access that could connect homes to fiber. I’m not sure that quite constitutes a monopoly, at least not necessarily. I expect that many areas will end up without real competition with only one entity providing access, just as some areas will continue to see no access at all.

Paul Brinker (profile) says:

Re: Re:

But you cant, You need pole access, or you need to negotiate with each landowner between you and your ISP partner. Each pole you must touch must be done individually, and can only be done after the last one has been accomplished. Even if you and the owner use the same contractor for the work itself. Also each pole touch request takes 90 days, and they do not accept groups (say 5 in a row). This is all true on public poles that already have gear installed as well, as you "might" need to slightly adjust someone else’s equipment.

And good luck getting customers, corporate customers perhaps, but without a franchise agreement (that was given to AT&T about 40 years ago and renewed since then), your not allowed to sell to the public.

You (by you I mean Google), cant compete in this space because the contracts and the unwritten rules were put in place long ago. At least with out some new wireless tech and bandwidth gifted by the FCC.

Anonymous Coward says:

I’m ready for anti-trust hammer to break up Google’s vertical monopoly. In recent decades I cheered Google on as they injected competition into the telecom space. Viewing Eric Schmidt’s foray into unleashing Google’s expertise and predictive analytics leveraging their massive data sets for political campaigning, I can’t cheer them on anymore. Their employees are empowered to discriminate against makers using their platforms along political ideology. That crossed red lines. Google has to be broken up due to oversized influence on the market and the harms they create.

Anonymous Coward says:

Re: Re:

I’m sorry, how is Google harming the market again? Every single one of their products has multiple other competitors:

Android/iphone

  • Google Search/Bing (and a million other search engines)
  • gmail/Yahoo/Outlook/protonmail/etc…
  • Youtube/Vimeo/Twitch/etc…
  • Waymo/Uber/Lyft
  • Chrome/Firefox/Edge/Opera/Safari

I could go on but you get the point.

Viewing Eric Schmidt’s foray into unleashing Google’s expertise and predictive analytics leveraging their massive data sets for political campaigning

There is a discussion to be had regarding privacy and regulations regarding what you can and can’t do with such a dataset, but that is not the same as going after a company for antitrust violations.

Their employees are empowered to discriminate against makers using their platforms along political ideology.

What? When did this happen? And who is being discriminated against from using their platforms because they hold a different political ideology? (Racists, sexists, and Nazis don’t count)

Anonymous Coward says:

Re: Re: Re: Re:

Which does nothing to make you right.

He gave campaign tips/opinions to democrats. Big woop. That doesn’t even remotely equate to google employees having the ability to discriminate against "makers" from using google platforms based on political ideology. Which they don’t.

Thanks for dropping by Alex.

That Anonymous Coward (profile) says:

IIRC I’m pretty sure it was mentioned when this was first covered that Google probably wasn’t going to become a giant ISP (despite all of us wanting them to come to us) but their goal was to scare the shit out of the incumbents & rattle them to do something to compete, something they dunno how to do anymore.

Google Fiber was a shot across the bow that even Marsha Blackburn (the telcoms pet politician) couldn’t ignore, better faster cheaper service if only we weren’t held hostage… Amazingly our leaders are willing to help the telcos hold a gun to our heads and demand higher prices, deliver less, and change your name to asshole on your bill if you complain.

HegemonicDistortion says:

Google/Alphabet, Microsoft, Facebook, and Apple are sitting on piles and piles of cash. It’s stunning that — especially given their cash reserves — they would leave themselves so exposed to Comcast, Charter, and AT&T like this. They could jointly charter a new corporation (maybe even a non-profit, to collect some good will) to build out fiber and become an ISP; they could also join forces to put political pressure on Congress to make deployment easier and to regulate the current broadband monopoly/duopoly more strongly.

Valkor says:

Re: Re:

You and I both think that makes sense, but it exposes a fundamental difference:

To us, money is the means. To them, money is the ends.

We think of the useful things that we could do if we had means to do them. That’s how people think. People are capable of being altruistic. We might even be willing to blow our whole pile of cash on something that we truly believed would make something better.

Corporations think of money, how to get it, and how to keep it. Corporations are by definition incapable of being selfless. Corporations cannot be "people". If they were, they would be complete sociopaths. Google quitting fiber is a shame, but completely unsurprising.

Wendy Cockcroft (profile) says:

Re: Re: Re:

Agreed, given the statements made here: https://www.capitalismmagazine.com/2014/12/altruism-means-self-sacrifice-not-benevolence/

That is how such people think, and no, it’s not capitalism done wrong.

Capitalism is so beneficial even communists do it but they call it "State capitalism."

This is the so-called "free-market" capitalism we’re all supposed to accept without question… but there’s no such thing as a free market. The market that exists does need to be freed up and more competition would allow this. Breaking the ISPs’ stranglehold on politics would be a good start, enabling competitors to thrive. Call it what you like, I call it common sense.

Personanongrata says:

Half-Assed Infrastructure Equals Half-Assed Results

AT&T ultimately lost that suit, but not before Google Fiber was forced to shift tactics and embrace a practice called "microtrenching," which involves burying fiber a few inches below the road.

"microtrenching" is just another way of saying – half-assed infrastructure construction.

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