Google 'Fiber' Rollback Halts Expansion Plans For High-Speed Internet In 8 Cities

Nov 5, 2016
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For five years, Google and its parent company Alphabet have been spending heavily on Google Fiber, an ambitious project to extend lightning-fast internet across the country. But now Google is halting the rollout in eight metro areas. As Jimmy Jenkins reports from member station KJZZ, that's a setback for Phoenix.

(SOUNDBITE OF PHONE DIALING)

JIMMY JENKINS, BYLINE: Dialing up the internet in the early '90s took phone wires and a lot of patience. It sounded like this.

(SOUNDBITE OF DIAL-UP INTERNET STARTING)

JENKINS: Over time, connection speeds have increased exponentially. You can't hear the fastest internet access these days because data moves through fiber-optic cables. That change was driven mostly by huge telecom and cable companies.

But in 2010, a new player arrived, Google. The Silicon Valley giant announced an ambitious plan to roll out lots of fiber-optic wires. More than a thousand cities clamored to be chosen as a testing ground. And in 2011, one lucky city was named.

RICK USHER: Google Fiber has been a game changer for Kansas City.

JENKINS: That's Rick Usher, the assistant city manager in Kansas City, Mo. He says when Google installed high speed internet throughout his city in 2012, the impact was huge.

USHER: It's ignited our startup entrepreneur community, new interest in learning to code. It's opened the city's eyes to the possibilities of technology.

JENKINS: The next year, Google Fiber started to expand, adding seven more cities like Austin and Salt Lake. And they floated the idea of growing to more markets.

KOLBY GRANVILLE: I would've been out there digging the trenches with them. I wanted it that bad.

JENKINS: Kolby Granville is a city councilman in Tempe, Ariz., which joined with nearby Scottsdale and Phoenix in a quest to attract Google Fiber. He hoped the newcomer would shake up the market.

GRANVILLE: Tempe's really a two or three-internet-company town. We have one cable internet provider that provides high-speed internet. We have one DSL provider that provides high-speed internet and a few people that have satellite dishes on their house. And that is it.

JENKINS: With buy-in from city leaders, Phoenix pitched hard and won. In 2014, Google Fiber chose the Phoenix metro area and seven others for the next phase of development. Contracts were drawn and agreements signed for the use of right-of-ways. It all looked very promising.

But then just last month, Alphabet suddenly announced it's halting the Google Fiber expansion. Turns out it can be expensive to dig up streets and sidewalks to lay the miles and miles of cable. On an earnings call, Alphabet CFO Ruth Porat reflected on the ambitious project.

(SOUNDBITE OF ARCHIVED RECORDING)

RUTH PORAT: As we reach for moonshots that will have a big impact in the longer term, it's inevitable that there will be course corrections along the way.

JENKINS: Google Fiber laid off more than 100 employees. And its CEO has stepped down. As for the future, it looks like Google will focus less on wires and more on wireless. This summer, it announced plans to acquire Webpass, a wireless point-to-point internet provider.

For the cities that had been banking on Google Fiber, they'll look for other ways to boost broadband service because they know that's what businesses are demanding when scouting locations.

HANK LUCAS: I think it's the kind of thing that can be a deal breaker.

JENKINS: That's Hank Lucas. He's a professor of information systems at the University of Maryland. He says fast internet service is essential.

LUCAS: You might have roads. And you might have other services. But if you lack the kind of internet connectivity that people expect, I think it could be the deciding factor in a company deciding to locate in another city.

JENKINS: In the Phoenix area, they've taken it upon themselves to lay fiber cables when they dig up streets for construction. They want to be ready in case Google or any other provider comes calling again. For NPR News, I'm Jimmy Jenkins in Phoenix. Transcript provided by NPR, Copyright NPR.