About a week ago Google announced that it would seriously scale back on its Google Fiber initiative because the costs were just too high. The parent company’s CEO and co-founder of Google Larry Page gave the Google Fiber unit an ultimatum to “reduce the current cost of bringing Google Fiber to customers’ homes to one-tenth the current level.”
That has already cost Google Fiber about 500 employees, or half its work force. More recently, AT&T has lashed out against Google, taunting the company for “coming up with excuses for its shortcomings and learning curves.”
In what many felt was an unduly harsh criticism of Google, AT&T’s VP of Federal Regulatory Issues Joan Marsh posted comments about Google Fiber. Here are some excerpts from that blog:
“Google Fiber will no doubt continue its broadband experiments, while coming up with excuses for its shortcomings and learning curves.
It will also no doubt continue to seek favoritism from government at every level.
Google Fiber still complains it’s too hard, and costs too much, and takes too long – even as it’s reported that Google Fiber will now try to do all this with half its current workforce.
Meanwhile, without excuses or finger-pointing, and without presenting ultimatums to cities in exchange for service, AT&T continues to deploy fiber and to connect our customers to broadband services in communities across the country.”
So there you have it – an AT&T executive publicly dissing Google Fiber as an “experiment” and the company itself as an agenda-pushing, excuse-finding entity that will never get their fiber business off the ground.
Will Google Fiber Continue?
Yes, Google isn’t giving up on this initiative just yet. After all, they were the ones who goaded AT&T to enter the realm of 1Gbps internet connections in the first place. Without Google’s initial work, AT&T may well have slacked off for a few more years before deciding to invest in fiber networks across the country. Even now, the only reason AT&T is able to roll out the GigaPower service to so many cities is that the fiber infrastructure already exists – and AT&T is merely connecting the last mile to the consumer’s home or office.
But Google will have a hard time growing the segment considering that their boss wants them to cut spending by 90%. Google will still continue to roll out its wireless fiber connections, but at a much slower pace. They’ve already been disappointed once because even though they expected about 5 million people to sign up for Google Fiber, only 200,000 takers have come forward so far.
Things Aren’t Looking Good for Google
This new problem will be a major setback for Google’s parent company Alphabet Inc. With the bulk of revenues coming from Google’s advertising business, the company has few successes to show for all its efforts in smart cars, virtual reality, cloud, artificial intelligence and every other bet they’ve made so far. Yes, Android still rules the mobile market and they still have YouTube contributing significant ad revenues, but even those businesses aren’t bringing in enough money for Google to say that it is a diverse company.
The only thing we can do now is watch and see how their wireless fiber tests are run over the next two years. By then, AT&T U-Verse GigaPower is sure to have significant penetration in the fiber internet market, and a mass rollout of wireless super-high-speed connectivity by Google is the only thing that will be able to disrupt the Internet Service Provider industry.
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