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What Happened to Google Fiber?

For many years, Google Fiber was celebrated as the Next Big Thing. This new, fast and inexpensive way to get online seemed like a cure for slow, expensive ISPs like cable companies. While only about a dozen cities actually had Google Fiber, seemingly every city in the country wanted to be the next one chosen.

But Google Fiber today is quite a bit different than it’s been in years past. What exactly happened to Google Fiber, and how will users and potential users be affected?

A Brief History of Google Fiber

Google Fiber was first launched in 2010 in Kansas City. Using fiber optic cables, it provided gigabit broadband and TV service. These incredible speeds were a whopping 40 times faster than the 25mpbs of typical broadband service.

Google Fiber quickly captured the public imagination. People wanted this fast, reliable service for themselves. Over the next eight years, Google Fiber expanded to just over a dozen cities including San Francisco, Austin, Denver, Chicago and more.

Recent Developments and Not-So-Great News

But despite a promising start, Google Fiber slowed and stalled.

Two notable events occurred in just the past two years. First, in 2016, Google paused the rollout of Fiber to any new cities. Additionally, in 2017, Google parent company Alphabet Inc. significantly slimmed down Google Fiber operations after naming a new CEO and transferring several hundred Fiber employees to other divisions.

Google Fiber is still available in the dozen cities where it was implemented. But expansion has stopped completely. Additionally, Google’s commitment to Fiber – both in dollars and team members – is decreasing by the year.

What Happened to Google Fiber?

So, how did such a promising start lead to the current situation? There’s no one single incident or management decision which is to blame. Instead, industry experts point to a combination of factors which lead to Fiber’s downfall. Here’s a rundown:

Decreased Demand

The blazing fast speeds of Google Fiber sound great in theory. But when Google Fiber was actually an option, people didn’t actually have much use for gigabit connectivity. The average residential customer simply didn’t need such fast speeds. For example, Netflix only needs a 25mbps connection to work without issue.

As more and more devices are connected to the internet, customers will need faster speeds. But that’s a future issue, not a problem most people face today. Much like Google Glass, Google Fiber might be ahead of its time, providing a solution for a problem that doesn’t actually exist yet. Fiber continually missed subscriber goals.

Currently, the only true need for a gigabit connection is from corporations who run data centers or cloud computing businesses. While the speeds offered sound amazing, they don’t actually have many practical benefits for the average residential customer.

Tough Competition from Cable Companies

Cable companies already have a tight grip on most of their service areas. This was an initial source of excitement for customers as, finally, they had an option for internet service beyond just one or two cable companies.

In order to even get Google Fiber up and running, Google had to rely heavily on their size and popularity. Basically, they made cities compete for Google Fiber. A city was only eligible for Fiber if they first completed a variety of specific tasks such as easing permit and construction requirements.

At first, cities seemed to be falling all over themselves to accommodate Google Fiber. But the cable companies already entrenched in these cities weren’t happy.

For instance, Louisville gave Google access to utility poles across the city. But it turns out the city didn’t actually own these poles. AT&T filed a lawsuit against Louisville claiming the city has violated federal rules. In response, Google said AT&T was attempting to prevent competition.

This lawsuit wasn’t an isolated incident. In Nashville, both AT&T and Xfinity filed similar suits against Google Fiber. In fact, cable companies caused problems just about everywhere Google Fiber tried to create a network.

The problem wasn’t so much Google’s inability to compete – in fact, they’re one of the few companies around with the resources to fight against the large cable companies. But having to wage a fight in every new city was both time-consuming and financially draining.

Increasing Financial Pressure

Lack of customer interest and constant cable company interference were becoming increasingly concerning to upper-level Google execs.

Google doesn’t have a traditional corporate structure. Instead, the company is split into two parts. The main part is basically all the sections of Google which turn a profit. This includes search, YouTube and all other ad-based services used by the consumer

The other section of Google isn’t necessarily focused on generating revenue. These are the more experimental ideas such as Google Glass, Nest, Fiber and even X — a semi-secret Google laboratory dedicated to delivery drones, balloons which deliver wi-fi and other experimental projects.

While this experimental section was never designed to make a lot of money quickly, it’s lack of revenue has been a growing problem for top Google execs. Fiber has actually been one of the more profitable projects in this division, but they’ve still been faced with general cutbacks and financial scrutiny.

Demand for Bundled TV

Many people get internet service through their cable company, and almost every cable company offers bundled packages. Consumers bundle cable, TV and home phone service into a triple-play package which can offer substantial savings compared to buying each service individually.

Even though many people aren’t satisfied with their cable company, they still like bundles. Google quickly discovered that customers weren’t willing to switch to Fiber unless a TV bundle was also included.

Unfortunately for Google, adding a TV service requires a substantial investment of time and money. Fiber executive Milo Median told a conference in 2014 that developing TV services was “the single biggest impediment” to Fiber’s wider rollout.

Google didn’t just have to pay for the rights to popular channels such as HBO and ESPN, in many cases they had to pay more than double what the cable company does, because Google wasn’t considered an established provider.

Increased Interest in Wireless Broadband

Even if Google Fiber didn’t have any of the other issues, it might simply be based on the wrong type of hardware. Like most other types of broadband, Google Fiber uses physical cables to deliver service. But the future might actually belong to a new technology called wireless fiber.

As the name implies, wireless fiber requires no cables. Instead, wireless hotspots are mounted throughout an area. These hotspots beam out wireless signals capable of allowing fiber-like speeds.

Google has already shown some subtle signs of moving towards wireless. They recently acquired Webpass, a wireless broadband company. Many experts speculate this is the first step towards a larger wireless fiber network.

Theoretically, wireless networks have a variety of advantages over traditional cables. They’re easier to install, and would possibly reduce the basis for legal actions by the cable company. Plus, wireless can potentially cover a wide range of areas, including rural areas which are typically underserved by cable broadband.

Final Thoughts

Google Fiber is still a fast, reliable internet service provider used by people in several major cities across the country. But expansion of the service is unlikely. A combination of cut-throat cable competition, customer preferences and technological limitations have basically put the brakes on Google Fiber for the foreseeable future.