With Loon Dead And Google Fiber Frozen, Google's Broadband Disruption Plays Aren't Looking So Hot

from the do-not-pass-go,-do-not-collect-$200 dept

When Google Fiber launched back in 2010, it was heralded as a game changer for the broadband industry. Google Fiber, we were told, would 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 dropped thanks to this added competition (fancy that!).

The fun didn’t last. 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.

Now another Google broadband disruption play is meeting a similarly uninspiring end. Google Loon, Alphabet’s attempt to use coordinated hot air balloons to provide supplemental broadband service to hard to reach areas, is being shuttered after nine years of development. While the company quieted many doubters who didn’t think the project would work, it said it was never able to find a sustainable business model:

“While we?ve found a number of willing partners along the way, we haven?t found a way to get the costs low enough to build a long-term, sustainable business. Developing radical new technology is inherently risky, but that doesn?t make breaking this news any easier. Today, I?m sad to share that Loon will be winding down.”

Unlike Google Fiber, Loon was less about disruption and more about supplementing existing service. Whereas Google Fiber directly challenged incumbent telecom providers, Loon was supposed to be a tool to work hand in hand with those companies to supplement existing and patchy cellular service, especially in less developed nations. It’s fairly clear those companies weren’t interested in partnering with a potential competitor in other spaces. And while Loon will be headed to the great project graveyard in the sky, the company hopes some of the coalitions built around the effort persist:

“The Loon team is proud to have catalyzed an ecosystem of organizations working on providing connectivity from the stratosphere. The world needs a layered approach to connectivity ? terrestrial, stratospheric, and space-based ? because each layer is suited to different parts of the problem.”

To be clear, disrupting telecom isn’t easy. It’s a largely broken sector largely dominated by monopolies that are politically powerful because they’re tethered to the nation’s intelligence and emergency response infrastructure. And while Google may have not fully succeeded at disruption (in part thanks to dubious behavior by telecom monopolies), projects like Google Fiber certainly did help amplify a lack of US broadband competition, and provided a helpful template for a lot of communities eager to strike public/private partnerships to try and improve regional broadband infrastructure.

At the same time, the ongoing shift away from these moonshots despite a mammoth budget is highly reflective of how Google is a much less interesting and far less creative and courageous company than it was a decade ago. While it’s understandable the company wouldn’t want to throw a fortune at projects with no returns, the way it has backed away by Google Fiber — firing employees and mothballing the project without really admitting the project is on ice — is pretty reflective of a slow but steady culture shift away from the kind of curiosity and integrity that initially made Google so interesting.

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Companies: google

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Comments on “With Loon Dead And Google Fiber Frozen, Google's Broadband Disruption Plays Aren't Looking So Hot”

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TMC says:

Natural monopoly

Example #1203 as to why wired Internet connectivity is a natural monopoly appropriate for government regulation or control: one of the most monied companies on the planet cannot compete with entrenched incumbents, and those incumbents do not compete among each other.

Anonymous Coward says:

Re: Natural monopoly

Example #1203 as to why wired Internet connectivity is a natural monopoly appropriate for government regulation or control

To be more accurate, last-mile infrastructure seems to be the main natural monopoly here. With city-owned wire or conduit from homes to reasonably large aggregation points, we might not need all that much regulation or control over services, pricing, or availability.

Large condominium complexes are a reasonable example. Small companies are still involved here, and can provide cheap service people are happy with. It’s because they can get hundreds of subscribers through 10s of vertical conduits, with one negotiation.

Anonymous Coward says:

Re: Re: Re: Natural monopoly

it is /way/ cheaper for the ISP to install and maintain for 1k customers in a condo building than it is 1k customers in suburbs.

Back in the dialup days, an ISP didn’t need to manage infrastructure at the customer’s house. They just needed some tens/hundreds of phone lines and a backbone link, and anyone within local calling range (or willing to pay/scam long distance) could join. Suburban subscribers were on par with urban ones, with the rural population not being too far behind.

There are lots of infrastructure models that don’t require government micromanagement. In a decade or two, the then-highly-regulated cable and phone providers might regret having rejected them.

Yakko Warner (profile) says:

Coincidentally, here's another one

Google just announced that they’re backing out of game development, before it really got going. First-party Stadia development studios have been shut down. Stadia itself remains as a supported platform for third parties to publish to (for now).


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