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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Filed Under: broadband, competition, fiber, google fiber, louisville

Companies: google