Google Fiber Hits Trouble Waters As Alphabet Tightens Purse Strings, Halves Staff

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When Google Fiber first launched in Kansas City back in 2012, it was hailed as a revolution in high-speed internet connectivity for consumers and businesses. Offering gigabit internet speeds for $70 per month was unheard of at the time, and Google promised to quickly spread the service across the United States.

Four years later, Google Fiber deployments have rolled out a snail-like paces as [now] parent company Alphabet has run into problem with geography, city ordinances, and entrenched broadband players like Comcast and AT&T. And according to a new report from The Information, Alphabet is putting Google Fiber on notice and is demanding that the unit cut costs.

Alphabet is being a lot more diligent about monitoring the financial performance of its money-losing businesses and Google Fiber is a prime target. Google Fiber chief Craig Barret has already been tasked with halving his employee count to just 500, which is detrimental to a business that is trying to ramp up operations across the country.

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Google Fiber has found that digging up city streets and connecting hundreds, thousands (and eventually millions) of customers with fiber cabling is an incredibly daunting and expensive task. Recode reports that it cost Google Fiber $1 billion just to lay down fiber in Kansas City; and there’s no guarantee that every person will sign up for the service. And when Google Fiber attempted to go “above ground” by installing fiber equipment on existing utility poles in Nashville, it found stiff pressure from the likes of Comcast and AT&T.

The Information reports that Google had initially set a goal to have 5 million Americans connected to Google Fiber by the end of 2015. However, Google Fiber had just 200,000 subscribers (as of late 2014), which is incredibly disappointing no matter how you look at it.

Google Fiber, however, is looking for an alternative way to hook up customers that could speed up deployments for a fraction of the cost. The company is leaning on its acquisition of Webpass to provide gigabit internet speeds wirelessly to customers. Google Fiber is looking to setup “experimental transmitters” in roughly two dozen locations across the United States including Raleigh-Durham, North Carolina and Boulder, Colorado.


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