Fiber Failure: Why Google is Quitting Its Residential Broadband Project

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Google Fiber, an ambitious project to offer the fastest internet broadband speeds in the United States, has been placed on indefinite hold by parent company Alphabet. According to a recent post on an official Google blog, the Fiber project will not only stop its expansion but may also involve reassigning some employees and issuing pink slips to others.

The Switch to Wireless
The Google Fiber project started a few years ago in Kansas City, and it involved the actual installation of underground fiber optic networks to deliver residential internet access that would be on par with Asian and European metropolis. In addition to high-speed broadband access, Google Fiber also included entertainment via IPTV and VoIP telephony to its customers.

Prior to its suspension of activities, Google Fiber reached 12 cities, but its expansion to major metropolitan areas such as Los Angeles, Oklahoma City, Phoenix, and Portland is now up in the air. In fact, the company also planned to offer service in San Jose, the heart of Silicon Valley.

In recent years, market analysts noticed that Google was running into considerable bureaucracy as it tried to expand. Major competitors such as AT&T, Time Warner and Verizon were also nipping at the heels of the tech giant.

Google will likely continue to explore its ability to offer internet access, but it may switch to wireless broadband. Earlier this year, the company mentioned its desire to test a new wireless broadband project, also in Kansas City.

Possible Investor Pressure
Fiber is not the only major project that Google has called off ever since it restructured as Alphabet and hired Chief Financial Officer Ruth Porat, who has instilled financial discipline to please major shareholders.

The company is unlikely to abandon its present Google Fiber commitments; however, it would not be surprising to see this project being outsourced or sold. Alphabet has shown willingness to work with outside partners in significant projects; one example is Niantic working with Nintendo on Pokemon Go.

If anything, Google Fiber has already stoked the fire of competition as other companies are rushing to provide similar services, particularly now that Alphabet is putting this project in the back burner.

Tech analysts believe that Google will now seek a way to leverage its existing fiber optic network to offer what is known as Last Mile internet service, which means offering wireless broadband to remote communities so that more users can be reached by the company’s massive advertising commitments.