Google Fiber is halting its rollout in 10 cities and laying off staff as its chief executive Craig Barratt steps down, dealing a major setback to the Internet giant's ambitions of blanketing the nation in super-speedy Internet.
Fiber is changing its business and product strategy to focus on new technology and deployment methods "to make superfast Internet more abundant than it is today," Barratt said.
Cities that have begun to roll out Fiber will continue. But, said Barratt, operations will pause in "potential Fiber cities" where Fiber has been in exploratory discussions.
"We’re confident we’ll have an opportunity to resume our partnership discussions once we’ve advanced our technologies and solutions. In this handful of cities that are still in an exploratory stage, and in certain related areas of our supporting operations, we’ll be reducing our employee base," Barratt wrote.
Google Fiber is in eight metropolitan areas and is committed to building in another four. It has been rethinking how it delivers speedy broadband access, shifting to wireless, a less expensive alternative to digging up streets and laying down fiber cables. Fiber is striving to bring Internet speeds of one gigabit per second to cities around the country, but progress has been slow.
Fiber recently said it would buy Webpass, which delivers its services to homes and businesses by sending data between transmitters installed on top of buildings.
Fiber is looking at a combination of
Google Fiber is part of Alphabet's Access division created in the corporate restructuring of Google as Alphabet.
On recent earnings calls with analysts, Ruth Porat, chief financial officer of Google and Alphabet, defended the investment in Google Fiber, which is the most expensive division inside Alphabet apart from Google itself.
"Alphabet seems to have been rethinking lots of its non-core activities and either focusing them more narrowly, divesting them, or making other changes. It feels like this is the latest shoe to drop," said Jan Dawson, chief analyst with Jackdaw Research. "Although Google is framing this as a pause while it considers next generation technologies, I would hope that it’s actually a concession on the company’s part that being in the access business is a distraction rather than a strategic imperative."
The reason? "You could argue that Google has actually achieved its objective of getting more fiber broadband built by opening the doors to AT&T and other companies who are now building out fiber much more rapidly thanks to the changes to the franchising process driven by Google," Dawson said. "Fiber is rolling out much more quickly now — it’s just not Google’s fiber."