Google Fiber Ditches Cable TV While Broadband Effort Remains Stuck In Neutral
from the empty-promises dept
When Google Fiber first dropped in 2010, the project was lauded as a game changer for the broadband industry. Google Fiber would, the company insisted, revolutionize everything by taking Silicon Valley money and using it to disrupt 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 some areas where Google Fiber was deployed, prices certainly dropped thanks to Google Fiber market pressure.
The party didn’t last.
In late 2016 Alphabet executives made it clear that the company had grown bored with the high costs and slow pace of trying to disrupt the broadband market (if Google can’t afford it, who can?). Employees were fired, the project was effectively mothballed, and all expansion was halted. The company bandied around a few suggestions it would pivot from fiber to wireless, but those efforts never actually materialized. While Google Fiber still offers service, the entire project now exists as a weirdly hollow brand that keeps smiling despite having been lobotomized four years ago:
Yesterday, our teams from across the country celebrated 10 years since we announced the beginning of our foray into the Internet universe.
And we can't wait for the years to come. ? ? ? ? #MoreCake #MoreInternet pic.twitter.com/I0JL58VtuQ
— Google Fiber (@googlefiber) February 11, 2020
Meanwhile, Google’s product lineup continues to shrink. The company last week announced it would no longer offer traditional cable TV service because it was, allegedly, returning to basics:
“As we return our focus to where we started ? as a gigabit Internet company ? we?re also ready to challenge the status quo, to finally come right out and say it: customers today just don?t need traditional TV.”
The move itself really isn’t a terrible idea. As the pay TV sector gets dominated by giants (AT&T Time Warner and Comcast NBC Universal) that own both the conduit and the content, the cost of providing that content is only soaring. Many smaller cable TV providers are also getting out of the TV business to focus on broadband because margins are getting tighter. And Google isn’t getting out of traditional TV entirely given it still offers live television via its YouTube TV live streaming service, which will now be upsold to Google Fiber users.
The problem for Google is that its promise to refocus on being a “gigabit internet company” really isn’t true. There hasn’t been a meaningful expansion of the service outside of a few key launch markets for years, and there’s plenty of frustration and annoyance among users who had been on the installation waiting list for years, only to have their installations cancelled. Even Google’s promised pivot to wireless, driven in part by its acquisition of Webpass, has resulted in less actual broadband availability.
All the while, the company’s PR department continues to pretend there’s nothing really weird about any of this, and should you ask them about it, you’ll receive ample claims that everything is continuing normally.
To be clear, Google Fiber did yeoman’s work highlighting a lack of competition in the U.S. broadband market. But the project is a faint echo of its original intent, and it seems awfully likely that sometime in the next few years the entire program gets offloaded to some incumbent telecom giant for a song.
Filed Under: broadband, cable tv, competition, failure, google fiber, tv
Companies: google
Comments on “Google Fiber Ditches Cable TV While Broadband Effort Remains Stuck In Neutral”
google is so frugal; cutting off dead projects left and right
anything to prevent their investors from becoming afright
‘here today, gone tomorrow’ (or better yet) gone tonight
alphabet, google, when will you get it right?
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Yeah, Karl was closer with "grown bored". This isn’t about it being literally unaffordable for Google. They’re not known for a long corporate attention span—they’re on, what, they’re 10th instant messager now? Or they’ve done the math, and found the Google Fiber customers don’t spend enough on other Google cloud services (compared to customers of other ISPs) to make it worthwhile.
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Of course, it’s always about monetization. Business isn’t charity and all, but eventually a lack of Consumer Confidence might come back to haunt Google.
It seems they have Investor Confidence down, but Consumer Confidence??? no comprende
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Google has put billions of dollars into the fiber roll-out, but when you have to fight incumbent ISP’s at almost every place the costs tend to skyrocket. Even Google has to has to make a judgement call if it’s economically feasible to invest in fiber, especially when you in some cases need to spend more money on litigation than laying the fiber.
I don’t expect any company to keep investing in a project that will cost more money than they will able to recoup within a financially viable time-frame and saying that Google abandoned the fiber is a bit unfair in this instance even though their reputation for dumping "failed" services/projects is well earned.
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I agree that the greater problem (greater than Google’s inconsistencies) is that the ISP’s are insulated from competition.
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"Abandoned" is basically a neutral term (that nobody but you used), and doesn’t imply they shouldn’t have abandoned it. Google Fiber isn’t abandoned, except in Louisville; it’s just not expanding. People with existing internet or cable TV services via Google Fiber get to keep them; new people can sign up for internet in their operating areas.
It’s fair to say they’re not expanding, even if the root cause is unfair market conditions.
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"This isn’t about it being literally unaffordable for Google"
Just because you have the money does not mean you have to throw it away.
It’s strange that the takeaway from this is not that competition is nigh on impossible if a company with the resources of Google can’t compete, but that Google are the bad guys for not volunteering to haemorrhage money.
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Where do you get this idea? The statement was that Google could afford to fund it, not that they should or that competition is easy or fair.
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"The statement was that Google could afford to fund it,"
Well, that depends on what you mean by "afford". I could probably "afford" to move into a nice villa at double my current rent, if I just stopped saving money for the future. That doesn’t mean it’s a good thing to do, even if the people who live with me would prefer to do so.
The point is – for all the things to complain about on this story, some people choose to only complain about how Google are not just throwing money away.
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Fair enough, but then Karl might have used alternate wording, e.g. "if Google can’t turn this into a viable (/profitable) business". Google can afford to pursue bad ideas longer than any sane person would.
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"Google can afford to pursue bad ideas longer than any sane person would."
Yes, and part of the reason they got to be able to afford that was by pruning services at that point.
I understand what people are saying but "Google has lots of spare cash therefore they should keep (service that I happen to like) running at a cash loss indefinitely" is not a realistic argument.
Great while it lasts
I’m in the Kansas City area, their first and most expansive market, I am worried that they’ll eventually sell out, but I hope not. The service is fantastic, and they really did right by their 100mbit customers in the move to gigabit only. They offered a 500mbit plan for $5 more than the 100mbit plan. The plan was only available to 100mbit subscribers, and it’s frankly the best of both worlds. There’s no distinguishable experience difference between 500mbit and 1 Gb, so you’re basically getting the full experience for a substantial discount off the 1 Gb price.
Anyway, I’ve had nothing but stable, crazy-fast, low-latency service since I started with them, and I really hope they don’t go anywhere.
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Would be easier to list all the things Google didn’t grow bored with.
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So, what would you prefer? A company that regularly innovates but also regularly prunes the services that are not finding a market and/or losing it huge amounts of money? Or, a company that never bothers to innovate in directions that aren’t already proven to be profitable? I know which I prefer.
I’m also constantly amused by this attitude regarding fibre specifically. Google ploughed billions of dollars into an ambitious scheme and due to circumstances created by the incumbent ISPs were forced to back off. Then, your problem is not that competition now proven to be impossible in that space, but the Google decided not to throw away huge amounts more money?
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This seems to be a touchy subject for you. Google’s PR problem isn’t our problem to solve (our = random internet commenters), but that doesn’t mean they don’t have one. For a start, how about they manage expectations by making it clear which things are their experiments and which ones they’re serious about?
Yeah, where would people get the crazy idea that this was here to stay? If Google were surprised that incumbent ISPs would act in anticompetitive ways, perhaps they should have first talked to literally anyone who had ever dealt with them.
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"Yeah, where would people get the crazy idea that this was here to stay?"
Depends on whether or not they understood that "we’re actually running it as a business" included the option to go into liquidation if it were massively unprofitable. Pan Am and Blockbuster were run as businesses too.
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But does anyone accuse them of having given up to let their businesses stagnate? Pam Am faced major regulatory changes they couldn’t have predicted while they were expanding; Blockbuster faced market changes that were likewise unpredictable in their VHS heydey. Google, by contrast, faced exactly the challenges anyone would have predicted. I think it was fair to expect them, based on that quote, to have made a better effort; to have actually gotten the incumbents into a nationwide scramble to compete, rather than just making pricing adjustments within the Google Fiber cities.
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"Pam Am faced major regulatory changes they couldn’t have predicted while they were expanding"
There were other challenges, but the point remains – running something "as a business" includes the option that the business will die if certain conditions occur.
"Blockbuster faced market changes that were likewise unpredictable in their VHS heydey"
But definitely not unpredictable after that. There was a long time between VHS and them failing. They spent years flailing around pretending that DVD delivery and then streaming were going to be the next big thing (even refusing to buy Netflix when they had the option). Their fate was entirely predictable several years before their demise.
"Google, by contrast, faced exactly the challenges anyone would have predicted."
Some, maybe, but not all and the outcomes of their battles weren’t totally predictable. But, someone has to fight these battles. What you appear to be saying is that as they could predict the challenges, they needn’t have bothered at all.
"I think it was fair to expect them, based on that quote, to have made a better effort; to have actually gotten the incumbents into a nationwide scramble to compete, rather than just making pricing adjustments within the Google Fiber cities."
You think that it was fair to expect them to fundamentally change the entire market on a national level while entering the market as a local ISP?
This may well have happened if they had been more successful, but I don’t see how you can both state that the challenges were entirely predictable, and also expect them to do something that was obviously impossible while those challenges remained in their way.
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Their only thing they really haven’t gotten bored over is Google Search. Then again, maybe they have but since that is where they make most of their money, they are stuck with it. The list of abandoned Google projects is quite long.
If only Google Fiber had gone someplace. It could have been huge for them. All that Data they could have had access to also. I’m surprised they’re keeping Google Fiber going still with what they put out there. I guess they want to break even and then maybe they’ll cancel?!?!
We really need to get out of these Governments created Monopolies. I wouldn’t care if there was Comcast, TWC and any number of other cable or Fiber company’s all fighting over each other in every city in the U.S. Caps would be gone,prices lower, and service way up!!!!
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Why do you Americans keep on pushing for the worst solution to a natural monopoly, and that is duplicating the expensive infrastructure? A much better solution is to use regulation to force a split between the infrastructure provider, and service providers, and ensure that service providers can gain access to that infrastructure on equal terms.
Lets look at the economics of competition at the infrastructure level. If 5 providers build out to be able to serve every residence in a city, the build costs are 5 times higher than they need to be. A bit of cost competition, and the weaker players go bust, and the infrastructure is no more than a cost liability to the ISP still in business, and so they do not buy it, and it get left to rot on the poles and in the ground. In reality, there will be a lot of shake out during the build out phase, leading to local monopolies, as it is easier to get customers by building out in underserved area, rather than going head to head with an established encumbent.
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The Americans did try that, until 2005, but it turned out that the phone companies didn’t like these rules, so the government changed them. Officially, it was to align the DSL and cable rules. A non-regulatory-captured agency might have made the cable rules more strict instead.
"The Federal Communications Commission on Friday [Dec 9 2005] voted to reclassify DSL broadband service, thus freeing phone companies of regulations that require them to share their infrastructure with Internet service providers."
And from 2018, Large ISPs Urge FCC To Kill Remaining Line Sharing Rules. "’When outdated and overly restrictive regulations are rolled back, innovation and investment thrives,’ the [lobbying] group said" (contrary to all available evidence).
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Well then, work on fixing your regulatory system, which requires the elimination of political patronage in appointing those at the top of agencies as short term appointees.
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"Their only thing they really haven’t gotten bored over is Google Search"
…and their ad business. And GMail. And Google News. And Google Photos. And Google Docs… And Google Drive.. And Google Maps… And Chrome… And Android… And…
There’s plenty they stick with, it’s just that every time they make a business decision you get fanboys whining about how they’re choosing to discontinue something they personally use.
"The list of abandoned Google projects is quite long."
Yes. Would you prefer they never tried anything new, or should they as a business just waste billions on every unprofitable idea they’ve ever tried? Do you do the same whining about every other business which has discontinued products, or just this one?
"We really need to get out of these Governments created Monopolies"
What you need is effective government regulation, like the ones in the many other countries that have better, faster, cheaper internet. You’ve just been trained to opposed it.
Announcement was made 4 years ago in my city. Broadband prices dropped 50$.. 39$ a month and speeds went from 25 to 300 mbps They made the announcement they are not continuing in my city. Internet cost are back up to 89$ a month. Speeds are staying the same at least.
First gear
Coincidentally, I spent the last couple of days watching Google subcontractors running brand new fiber into my neighborhood, so maybe stuck in first gear is a better analogy.
It seems that in “supported” areas like ours (Raleigh-Durham) the actual coverage is very far from complete, but, they do continue to “fill in the gaps”. By adding more cities, they would, in some sense, fall even further behind. I suspect they drastically underestimated the time and costs of what they had already committed to, but at least here, they have not stopped completely.
First gear
Coincidentally, I spent the last couple of days watching Google subcontractors running brand new fiber into my neighborhood, so maybe stuck in first gear is a better analogy.
It seems that in “supported” areas like ours (Raleigh-Durham) the actual coverage is very far from complete, but, they do continue to “fill in the gaps”. By adding more cities, they would, in some sense, fall even further behind. I suspect they drastically underestimated the time and costs of what they had already committed to, but at least here, they have not stopped completely.
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