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Google Fiber Pauses Operations, CEO Leaves, and About 9 Percent of Staff Is Being Let Go (bloomberg.com)

Posted by BeauHD on from the new-strategy dept.

The future of Google Fiber has been shaky ever since Google's parent company, Alphabet, was founded. The original plan was to expand Fiber's blazing fast internet service to more than 20 cities, with the goal of eventually delivering nationwide gigabit service. However, Alphabet hit the reset button on those plans Tuesday. Not only is Google Fiber CEO Craig Barratt leaving, but about 9 percent of staff is being let go. That translates to about 130 job losses, since the business has about 1,500 employees. Bloomberg reports: Barratt wrote in a blog post that the company is pulling back fiber-to-the-home service from eight different cities where it had announced plans. Those include major metropolitan areas such as Dallas, Los Angeles and Phoenix. Moving into big cities was a contentious point inside Google Fiber, according to one former executive. Leaders like Barratt and Dennis Kish, who runs Google Fiber day-to-day, pushed for the big expansion. Others pushed back because of the prohibitive cost of digging up streets to lay fiber-optic cables across some of America's busiest cities. "I suspect the sheer economics of broad scale access deployments finally became too much for them," said Jan Dawson, an analyst with Jackdaw Research. "Ultimately, most of the reasons Google got into this in the first place have either been achieved or been demonstrated to be unrealistic."

26 of 204 comments (clear)

  1. Saw this coming years ago. by Anonymous Coward · · Score: 4, Insightful

    People think it should be cheap and easy to get high speed broadband internet to everyone. They think we should have a dozen different companies doing it and they all can compete and prices will fall through the basement. What they don't understand is how fucking expensive it is to run wires around the country. I don't know why Google, in all their arrogance, thought they could do something on the cheap that people a lot cheaper than them have been trying to do for decades. All I can do is smile and laugh at their hubris, and listen to everyone on /. bitch about 'monopolies' when as you can see there is a very good reason there are very few broadband providers in most areas - you can't divide the customers up that many ways and expect anyone to make a profit. And if there is no profit, no private business is going to attempt it.

    1. Re:Saw this coming years ago. by Whorhay · · Score: 3, Insightful

      Not all government entities are created equal, and the same is true for private enterprise. I've never had a problem with my municipal services that cover gas, sewage, trash pickup, electricity, or water. The times I've had to contact them I've gotten an actual human on the line that resolved the issue quickly or helped me figure out the right party to contact to resolve the problem. Meanwhile dealing with both the phone and cable companies I've used over the years have always been exercises in frustration.

      Granted the above is only my experience and isn't necessarily representative of other municipalities and commercial enterprises. But going on personal experience I would love to hand over the administering of physical infrastructure for fiber internet connections to my municipality. Let whatever ISP's are interested rent usage of that publicly owned infrastructure, just like they already do when paying pole fees.

  2. hand mirrors and morse code by Pseudonymous+Powers · · Score: 5, Interesting

    Dammit! How hard is it to dig a trench and lay a cable in it? I know the trench-digging part at least is easy, because where I live they manage to knock out at least one vital utility a year digging around at random.

    Do I have to do it myself? Because me and at least 20 people I know would gladly volunteer to buy a spool of fiber and dig a mile of trench each with hand shovels if we knew for sure they wouldn't arrest us for it.

    The real question, of course, is how hard it is for local politicians not to take bribes from incumbent telecom providers to slow things down. And the answer is, apparently, pretty hard.

    1. Re:hand mirrors and morse code by jeffb+(2.718) · · Score: 3

      It took a crew contracted to AT&T about a week to lay fiber alongside the road to our house. That's a distance of maybe 300 meters. I imagine they were working other areas at the same time, but I was amazed that it took so long from start to finish.

      They had to cross one residential street and a lot of driveways. For the driveways, they dug a pit at either side, and used a driver to tunnel underneath. For the street, I think they had to cut a hole in the middle, because it was too far for the driver to bridge in one pass.

      A week or two after they finished, we lost water pressure. They'd damaged a pipe near the other end of the road. A city crew had to roll a backhoe, a dump truck, and a fair number of people to find the leak, excavate it, repair it, and refill it. As I understand it, the contractor who laid the fiber will be billed for that. Either they'll bill it back to AT&T, or they'll roll it into their future rates, or they'll go out of business and the remaining contractors will raise their rates to compensate for the market shift.

      I wish Google had gotten here first. I really don't want to deal with AT&T's data caps and MIM attacks on my traffic, nor do I want to pay many hundreds of dollars a year extra for the privilege of having them behave like a common carrier. So right now, even after AT&T went to the expense of laying fiber practically to our doorstep, I'm not a customer, and they're getting zero return on their investment from me.

      Laying fiber through a developed area is hard and expensive, and the rewards are uncertain.

    2. Re:hand mirrors and morse code by Pseudonymous+Powers · · Score: 5, Insightful

      Based on this and other responses, plus my own experience with outages, it sounds like what America really needs now is some better methods for tracking where the existing infrastructure is, better standards for placing new infrastructure so that the next crew can put something else in without destroying what's already there, and better laws for determining who's liable when things go wrong.

      Of course, when I say "what America needs now", what I really mean is "what America needed 100+ years ago, when they first started putting these things in".

    3. Re:hand mirrors and morse code by guruevi · · Score: 5, Informative

      It's pretty hard. I only have experience with a metropolitan area network but I suppose home fiber will have a similar cost. For a ~1 mile stretch consider the following:

      a) You have to engineer the way the cables will go where they will terminate, what equipment you'll be using, where you'll be tapping off (fiber to each house or to a central unit).
      b) You have to survey for existing cabling and make sure your installation doesn't encroach upon private property. This could be as easy as dialing a number and getting some plans or as expensive as having a ground radar and doing land surveys.
      c) You usually have to notify and have permits for digging up. Sometimes the city will take it upon themselves, other times you have to do it. Cost of permits and notices to 100 houses
      d) Install tubing, lay cables, 8 people, a backhoe and a dump truck will take a good week or two if all the surveys have been done correctly. Off course if you manage to hit a thing with the backhoe, you could be delayed for a day or two. You still have to pay the construction workers.
      e) Fill the holes and repair side walks, lawns and streets you have broken open. Again, 4-6 people with equipment will take about a week doing that.
      f) Fielding complaints, law suits, talking to locals why you didn't re-plant their lawn Kentucky Blue Grass etc

      And then we haven't talked yet about material cost of lines, piping etc. Our estimates average about $500k/mile with a mix of overhead and underground cabling which isn't expensive since you can easily service 200 houses on a mile stretch. Underground is about 5 times as expensive as overhead. Obviously most of these costs are eventually fully funded by the tax payer (operators pretty much get paid for laying Internet lines) but it's a huge upfront cost and a player like Google won't benefit from grants since it's not really a local political player.

      Last week we had a backhoe operator hit a line twice, the second time he literally ran off and went missing for 3 hours without notifying anyone. Obviously he doesn't work there anymore but it caused a delay of 2 days between fixing the line and finding a new licensed operator and bringing them on site.

      --
      Custom electronics and digital signage for your business: www.evcircuits.com
  3. This is Unfortunate by ddtmm · · Score: 4, Insightful

    What this means is there really isn't ever going to be any meaningful competition in internet service providers in the foreseeable future. If Google with all it's cash can't feasibly put a competitive service together then no one can. If anything, competition is disappearing, with AT&T/TimeWarner's merger and all. Although we still need to see if that gets approved.

    1. Re:This is Unfortunate by guises · · Score: 5, Informative

      Well it may be true that no one can feasibly lay cable in a fiscally competitive way, but that isn't the only way to achieve a competitive marketplace. Redundant cable is really a pretty stupid way to do that - we could always just do what most countries do and implement unbundling access rules. In fact we have those rules on the books already, they were part of the telecommunications act of 1996, they just couldn't be exercised because of the FCC's stupid "third way" decision to classify ISPs as something other than telecommunications services. Now that they've reversed that decision, and once all of the lawsuits regarding that have been resolved, maybe we'll be able to have some competition among ISPs.

  4. Laying cable by sjbe · · Score: 4, Insightful

    Dammit! How hard is it to dig a trench and lay a cable in it?

    It's challenging. Not in the sense that they don't know how to do it but rather that it's expensive and unless you already have customers it's financially risky. To build a whole network is enormously expensive.

    I know the trench-digging part at least is easy, because where I live they manage to knock out at least one vital utility a year digging around at random.

    Umm, that would be evidence that it is NOT easy.

    Do I have to do it myself? Because me and at least 20 people I know would gladly volunteer to buy a spool of fiber and dig a mile of trench each with hand shovels if we knew for sure they wouldn't arrest us for it.

    I don't think you have the foggiest idea what you are proposing. I have immediate family that has been in the business of laying underground cable. There is a lot more to it than digging a trench and dropping a cable to the bottom of it.

    1. Re:Laying cable by stdarg · · Score: 3, Informative

      I don't think laying the cable is the hard or expensive part anymore. AT&T put fiber in my neighborhood last year, and what they do now is dig holes periodically and use a machine to just push the conduit right through the ground like an earthworm. I guess the holes are to make sure it's on course, I dunno. It's pretty cool and very fast.. they ran fiber past 200 houses and about 3 linear miles of street in less than a week with about 20 guys. I don't know how much the actual conduit and fiber cost, but figuring $20/hour per person it ended up being around $80 of labor per house for that stage. That's a lot less than I expected.

    2. Re:Laying cable by sjbe · · Score: 4, Informative

      Great! Can you please elaborate? Particularly about equipment costs and stuff?

      Cost is a complicated and depends on the situation but a very simple case probably would be somewhere between $5000-20000 per user for data cable for a simple run presuming there were multiple users along the route. High power lines can be far more expensive. Underground cable is somewhere between 4-8X as expensive to lay as overhead cable. The biggest costs are typically the civil engineering involved. Especially if you have to dig up or work around any existing infrastructure.

      Equipment? Depends on what you are doing and where you are doing it. Ignoring the equipment to hook into existing infrastructure you're looking at trenching equipment, cable feeding equipment, and a variety of other goodies. You also have to watch for buried power, data, gas, water, and sewer lines which aren't always well documented. Dig by hand? Don't make me laugh. To do it right you have to lay the cable below the frost line in most cases which can be several feet deep in many places. I know code near me for a simple drop requires a minimum depth for cable TV cable of 18 inches.

    3. Re:Laying cable by jabuzz · · Score: 4, Interesting

      Usually old gas pipe was steel/iron. What they do is push some plastic pipe down the existing pipe, then blow hot air under pressure into it. This causes it to soften and expand so that it takes the form of the existing steel/iron pipe. The existing pipe can now safely rust away. At least this is what they do in the UK.

    4. Re:Laying cable by Zak3056 · · Score: 3, Interesting

      Oops I mean $560/house.

      You're still (probably quite a bit) low. Your $20/hr is definitely short of the fully loaded cost of those guys (these are usually not day laborers picked up outside Home Depot, but skilled professionals in their own right, and even the flaggers are probably members of CWA) and your time calc is also probably just to "pass" the house. It costs more time to put the peds/dog houses in at each house, then to string or bury the cable to the house itself. All in all, your labor cost "per house" is probably pushing 10x the above number.

      --
      What part of "shall not be infringed" is so hard to understand?
  5. RANT! by rfengr · · Score: 5, Insightful

    Why the fuck could the entire country be electrified (rural electrification), stringing heavy cables to every small town. Why the fuck could the entire country have telephone access (rural telephony), stringing twisted to every small town. Now in the 21st century they can't run a damned glass fiber (cheap compared to copper) in the most dense areas, never mind stringing it along mostly empty telephone poles. Give me a fucking break. I suppose the telcos took the money and run.

    1. Re: RANT! by Anonymous Coward · · Score: 4, Insightful

      The past is a different country: we just don't like doing things anymore if they're hard and not immediately profitable.

    2. Re:RANT! by Kohath · · Score: 5, Insightful

      What did electricity compete with? Darkness and ice deliveries. What does fiber compete with? Services that are already roughly comparable to fiber.

      Who needs electricity? Everyone who doesn't have it. Who needs fiber? A small percentage (10% ?) of people who want to do something a regular cable/DSL 25Mbps connection isn't good enough for -- and who can't already get better service.

      Fiber is an incremental benefit for a smallish subset of people.

    3. Re:RANT! by Kohath · · Score: 3, Informative

      Upgrading when you need to upgrade is stupid? Because communications technology gets more expensive over time?

  6. This is too bad. by aussersterne · · Score: 5, Informative

    I live in a GF area and love it. There are three tiers, 5 Mbps for $0 (yes, free broadband), 100 Mbps for $70, and 1 Gbps for $90. They have been absolutely bulletproof, the speeds are for real when tested, and the online system and the way that it integrates with their WiFi router is awesome.

    I have had multiple providers over the years, including Comcast and Verizon, and Google Fiber's product and service are easily better than the others.

    If Google can't make this work, there may be no hope for anything better for a long time to come. I just hope I don't lose it here!

    --
    STOP . AMERICA . NOW
  7. Re:In Seattle... by tripleevenfall · · Score: 5, Funny

    I live in Seattle, and the best I can get is a carrier pigeon delivering an illegible scrawl of slashdot postings on a crumpled up Halls lozenge wrapper.

  8. Re:In Seattle... by 14erCleaner · · Score: 4, Funny

    I was curious if anybody had implemented RFC 1149. Now I know!

    --
    Have you read my blog lately?
  9. Re:They better make it to my house... by mlts · · Score: 5, Interesting

    Same here in Austin... if a house has access to Google Fiber, it can add $20,000 to the value, from what a real estate agent told me.

  10. Short-sighted shareholders won out again.... by bev_tech_rob · · Score: 4, Insightful

    FTA....

    Moving into big cities was a contentious point inside Google Fiber, according to one former executive. Leaders like Barratt and Dennis Kish, who runs Google Fiber day-to-day, pushed for the big expansion. Others pushed back because of the prohibitive cost of digging up streets to lay fiber-optic cables across some of America’s busiest cities.

    'Others', as in SHORT SIGHTED 'ACTIVIST' SHAREHOLDERS who want that quarterly price target hit, were the ones who pushed back.

    --
    You're messin' with my Zen Thing, man.....
  11. Re:In Seattle... by Zocalo · · Score: 3, Informative

    The Bergen Linux User group have actually done this for real (for all of 9 packets though), and it was also discussed here. Or course, that's now old hat as it doesn't implement QoS or IPv6oAC.

    --
    UNIX? They're not even circumcised! Savages!
  12. Re:They better make it to my house... by Anonymous Coward · · Score: 4, Insightful

    When Google first announced their gigabit fiber plans I predicted this would happen, although I thought it they would actually finish a couple of cities before they gave up.

    You won't see widespread fiber to the home in your lifetime. Running all new wiring, to every house, in every neighborhood, in every city, was never a good idea. Would I like gigabit fiber? Of course. Who wouldn't. But the U.S. is too big, it costs too much, and it takes too long. Instead, we should be pushing for something that would benefit everyone, not just the 1% of the population lucky enough to be blessed by Google.

    End restrictions on municipal broadband.

    Local loop unbundling. Make the phone/cable oligopoly open their networks (that were built with government subsidies) to real competition. Speed will go up, price will go down and stupid bullshit like data caps will disappear overnight.

     

  13. Re:They better make it to my house... by Anonymous Coward · · Score: 4, Informative

    If you read the actual blog, the only cities where "operations" are being paused are those classified as "potential" Fiber Cities. Existing Cities (KC, Austin, Nashville) and Upcoming Cities (Irvine, CA; Huntsville, AL; San Antonio) are still going to have Google Fiber.

  14. *sigh* Par for the course... by rockmuelle · · Score: 4, Insightful

    I'd be surprised, but this is such a common pattern with Google/Alphabet (which I will refer to as Google for the rest of this post) when they try anything that's not Ad/Search related that it's more of a *meh*.

    Google Health, that Energy project that they seem to have wiped from search results, Google+, Google Glass, and so on. They put a huge amount of upfront capital into these projects and hype to hell out of them only to abandon them when they realize that it takes effort to build new, ground breaking businesses. Not everything will be handed to them like ads/search was. From that I can tell, it also seems to be a function of internal champions - one person drives these projects and when they lose interest, the projects die.

    From the tech eco-system's perspective, this is frustrating. As soon as Google announces one of these projects, everyone assumes they'll succeed and competition is stifled. Investors don't want to compete against Google. I run a genomic informatics company. Google Genomics is making noise in this space and every time we talk to investors or customers, we inevitably spend 5-10 minutes talking about Google. My stock response is to walk them through Google's past efforts with non-Ad/Search products and ask them if they're willing to risk Google losing interest.

    Google has an important place in the tech world, but they still act like a tween trying to fit in.

    -Chris