In 2010, Google officially announced its foothold in the fiber industry and dropped a blockbuster in the US broadband market. In 2012, Google Fiber Services was the first to be available in Kansas City. The service is sold at a high speed and low price, and it has firmly grasped the user's psychology. At the same time, it also has a TV function, which is eye-catching. However, for six years, Google has not been as high-profile and radical as it was when it entered. Recently, Google's fiber optic program has undergone major adjustments. Craig Barratt, Head of Access, and Senior Vice President of Alphabet (Google Parents), which directly manages Google Fibers, stepped down and became a consultant. At the same time, Google will suspend high-speed fiber network expansion plans in eight cities and will cut 9% of its employees. In response, Google's explanation is that it will adopt "new technologies and new means" in the field of broadband, which is a strategic adjustment. But no matter what, entering the optical network for 6 years, Google's fiber expansion is extremely slow, this strategic adjustment is to some extent a retreat from Google.
Strong debut for six years
Google Fiber has now served in nine major cities in the United States, and four cities are building networks. In another eight cities, Google is negotiating with the city government on the deployment network. This adjustment is to suspend the development plans of the eight cities.
The outgoing Barratt wrote in a blog post published on October 25th: "As we adjust our strategy, (Google) will suspend network and office deployment." It is reported that in the market that is still in the negotiation stage and for this purpose In areas that provide support, Google will cut 9% of its employees. According to informed sources, the number of layoffs is about 100 to 200. The main target is the person responsible for the deployment of Google Fiber in the new city. In the existing business and the market that is building the network, Google's work will continue.
In 2010, Google announced its high-speed fiber project. At that time, due to the slow progress of the telephone company's launch of high-speed broadband, people placed high expectations on Google, and more than 1,000 cities submitted applications. In 2012, Google Fiber Services was first introduced in Kansas City at speeds of 1 Gbps, which is equivalent to 30 times the average US network speed. Google Fiber has won a large number of "fans" for its stable, high-speed, low-cost services. This brought tremendous pressure to telecom operators at that time, forcing them to accelerate the deployment of ultra-high-speed broadband and face the challenges of Internet operators.
But building an optical network is not a simple matter. For the layman of Google, after a strong admission, the company is a long-term, complex project. In particular, the roads for the routing and the procedures for applying for poles are cumbersome. According to Google, in Nashville, Tennessee, according to Google's plan, about 4,400 municipal roads are needed, but only 30 of them have been used to date. It is reported that AT&T has a small number of poles, but 80% of the poles are owned by Nashville Power Services. Some media laughed that this slow pace of progress has always been the style of traditional broadband operators such as AT&T and Comcast. However, last month, the Nashville City Council passed legislation allowing Google to hire professionals to realign the lines of competitors on the municipal road to allow for room for Google, but the cost and risk of this move must be borne by Google. While operators are expecting this legislation to greatly accelerate the progress of Google's broadband deployment, other operators have launched strong protests. AT&T immediately went to the federal court after the legislation was passed, and Comcast followed suit to apply for a restraining order.
In many cities, Google faces similar experiences. In addition, the cost of deploying a wired network is extremely high. In recent years, the cost and time consuming of Google Fiber has exceeded expectations. The Wall Street Journal said that Google has spent hundreds of millions of dollars on this.
However, for the development data of the optical fiber business, Google has never disclosed it in a high-profile manner. In the earnings report of Alphabet, Google Fiber is classified in other Bet companies. In the second quarter of this year, this category had a total operating loss of $859 million and revenue of only $185 million. The fiber division's capital expenditures for the second quarter were $280 million. In the third quarter, Google launched fiber deployments in four new markets, and the existing or under construction network has covered 12 cities in the United States. However, Alphabet has not disclosed the number of users of Google Fiber.
Adjust strategy to wireless
It is reported that Google's adjustment strategy stems from the change of technology direction. Google said it will use new technologies and new deployment methods to carry out broadband services. Google emphasizes that the focus is on new technologies to improve efficiency and improve results.
Google did not say what technology to adopt. Many people speculate that it may be peer-to-peer wireless technology. Informed sources also revealed that Google Fiber made the decision to turn the main direction of broadband to wireless. Wireless deployment is much faster than fixed-line fiber. In June, Alphabet acquired Webpass, an Internet service provider that operates FTTP and point-to-point millimeter-wave (mmWave) wireless networks. The Webpass network is currently operating in six US cities, including Boston.
Just in August, a document submitted by Google to the Federal Communications Commission (FCC) said the company was testing a new wireless transmission technology that could quickly provide fiber-optic services. At the time, the outside world generally speculated that this means that Google's fiber strategy will shift from wired to wireless.
According to the document, Google has been testing new wireless transmission technology, which relies on the newly available spectrum to deploy fiber networks more quickly. A Google spokesman said: "This project is still in its early stages, but we hope that this technology will one day help us to introduce more Internet connection services to users." According to the "Wall Street Journal" news, Google is Research on the use of this wireless technology in more than a dozen major cities, including Los Angeles, Chicago and Dallas.
In fact, Google's acquisition of Webpass also helps it adjust its fiber strategy. Founded in 2003, Webpass provides business support for Ethernet-based fiber-optic connections, providing home Gigabit networks for buildings built in some markets after 1995. The company's main technology is to transmit between the fiber-optic antenna and the wireless antenna.
For areas where the business is suspended, Barratt said that once the technology and solution are updated, the deployment will be restarted. In addition, Google Chief Financial Officer Ruth Porat stressed that in the existing business market, Google will maintain its previous commitments, and the business is very active. Alphabet CEO Larry Page has repeatedly stressed that the company has not abandoned the Internet services business.
Google retreats to operators
At the same time that Google's fiber was frustrated, the traditional American Internet service providers came to the fore. It has been able to compete with Google Fiber in terms of service speed and price, and has a latecomer advantage in terms of network coverage.
Recently, the US telecommunications operator AT&T has been operating frequently. The company first stopped the activity of tracking the network behavior of Gigabit network users, and directly reduced the service price to 70 US dollars at the same price as Google Fiber. In one fell swoop, it gained a price advantage over Google Fiber. Because Google Fiber needs to pay an additional $60 a month for TV service, AT&T's GigaPowe service bundles its own TV business U-Verse. Subsequently, AT&T renamed GigaPower "AT&T Fiber" and directly collapsed with Google Fiber in its name. AT&T also announced that it will launch Gigabit fiber services in another 11 major cities.
The continuous move of AT&T this time can be seen as a signal for a full counterattack against Google Fiber in the Gigabit market telecom operators. Compared with Google, the traditional telecom operators represented by AT&T have made rapid progress despite a little delay. AT&T fiber currently covers 40 cities in the United States and is expected to increase to 45 by the end of this year. Eric Boyer, the company's senior vice president, previously revealed that it plans to cover 12.5 million people in the United States by 2019. At present, AT&T's progress is faster than this goal. According to statistics, since 2011, AT&T has invested $140 billion in wired and wireless networks. This scale has already left Google far behind.
Earlier, some analysts pointed out that Google's entry into the fiber-optic market is to try to stimulate existing Internet service providers to increase the speed of the network through shallow attempts, so that Google's various network-based businesses will accelerate development. Some people who are optimistic about Google believe that the company's participation will trigger the trend of Internet giants entering the broadband field, triggering the opposition between the old and the new. However, from the six-year exploration of Google, the difficulty of self-built optical network is beyond imagination, but the company's participation has undoubtedly accelerated the development of the US optical network, making the market more dynamic, and its strategic adjustment is not Exiting, but changing direction, will also put continuous pressure on traditional Internet service providers, forcing the latter to continuously improve the network and services.
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