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Strung out: Google Fiber reportedly slashing staff, may kill future expansions

For four years, Google Fiber has offered a high-speed Internet access alternative. The impact of its $70-for-gigabit-fiber plans has been enormous — competitors like AT&T, Comcast, and Time Warner have all variously slashed prices and improved their access speeds when Google enters metropolitan markets. For those of us who don’t live in one of the company’s seven metropolitan coverage areas, there was always the hope Google would bring the service to a nearby city at some point in the future.

Now, those plans appear to be foundering. While Google Fiber has been well-received in the press and technical publications, actual sign-ups appear to be far below the company’s target goal of five million people. Alphabet CEO Larry Page has reportedly asked the CEO of Fiber, Craig Barratt, to cut his staff in half and downsize to just 500 people.

The problems stacked against Fiber are significant. Digging to lay new fiber optic cable is extremely expensive — a similar problem is the reason Verizon stopped expanding FiOS into new markets years ago, though the company has recently made noise about restarting the initiative. One major problem may be customers — apparently Google Fiber only had about 400,000 paying customers at the end of 2014, and while we don’t know how many it has now, it seems unlikely to make its original goal of 5 million customers within two years.

Google has faced issues with expanding its network into new areas; AT&T has been accused of refusing to work with Google on line-sharing issues in metropolitan areas as required by law. Low subscription figures may have been impacted by these issues, but part of the problem is likely that Comcast, AT&T, and other companies that find themselves competing with Google Fiber magically discover they have the option to deliver significantly faster speeds at lower prices. Once that happens, customers have less incentive to switch. Usefulness may be another issue. While I’d personally love to have Google Fiber, my job also occasionally requires that I download huge amounts of data for game testing. If I didn’t need to install several hundred GB of games from time to time, I wouldn’t have nearly as much use for Google Fiber. I suspect other potential customers may find themselves in a similar boat.

Google has talked about using less expensive methods to connect its customers, including high speed wireless point-to-point access systems that would obviate the need to dig ditches and run cable. Unfortunately, most of the spectrum that’s been floated for these kind of systems is extremely high-frequency, which means signal quality degrades if it rains or there are leaves between the home and its line-of-sight transmitter. Since most Americans tend to prefer some green leafy things around their homes and it rains most places, there’s limited enthusiasm for building these kind of solutions. Wireless fiber is an oxymoron.

Google Fiber continues to roll out in Salt Lake City, its 7th metro area, but has paused in Portland and San Jose. Page has reportedly told Barratt to cut his cost of rolling out fiber to about a tenth of what it is currently — a goal that would be challenging to hit under any circumstances.

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