Google's Larry Page Got Bored Of Disrupting The Telecom Sector With Google Fiber

from the flying-saucer-shit dept

Thu, Dec 22nd 2016 6:20am — Karl Bode

Back in October Google Fiber confirmed that all was not entirely well at the disruptive broadband provider. The company announced that not only would it be shaking up its executive leadership, it would be eliminating some Google Fiber employees and putting a hold on fiber deployment to around nine cities (existing builds will continue, however). There were several reasons for the shift, the biggest being that the company wasn't happy with the time it was taking to build networks from scratch, and was considering a notable pivot to next-generation wireless to save both time and money.

But subsequent reports have suggested there's a notable split among Google/Alphabet executives as to the future direction of Google Fiber. Bloomberg recently unveiled some additional new details on this, noting how part of the underlying issue is that Alphabet CFO Ruth Porat has been engaged in some purse string tightening at the Mountain View giant. But the report also touches on the fact that Larry Page apparently grew tired of the slow pace of disruption in the telecom space because digging ditches isn't "flying saucer shit":

"But seeking permits to lay fiber is time-consuming and digging holes expensive. Former employees say Page became frustrated with Fiber’s lack of progress. “Larry just thought it wasn’t game-changing enough,” says a former Page adviser. “There’s no flying-saucer shit in laying fiber.” In October the company announced that it was dismissing around 130 staffers and halting the expansion of the fiber network in eight cities. Barratt resigned that same day."

In addition to navigating a labyrinthine maze of antiquated underground urban infrastructure, Google Fiber has faced all manner of delays caused by incumbent broadband providers like AT&T and Comcast, who work tooth and nail to hamstring Google Fiber and other competitors. From protectionist state laws intended to prevent cities from striking public/private partnerships, to attempts to prevent Google Fiber from quick access to utility poles, these companies have decades of experience using cash-compromised state legislators and regional regulatory capture against would-be competitors.

But this is all stuff Google Fiber knew full well before throwing its hat into the telecom arena. And while Page may not think that providing a desperately needed alternative to the existing broadband duopoly is "flying saucer shit," Google Fiber's impact on the market has been transformative all the same. Even with Google Fiber's admittedly sparse footprint, the mere presence of the service results in ISPs dramatically dropping prices and boosting their own deployments of gigabit service. Google Fiber's mere existence also created a necessary national dialogue on the sorry state of U.S. broadband competition.

Previous reports have suggested that executives at Google were split over Google Fiber, with some wanting the company to stay the path with fiber, and many others believing that wireless will be good enough. But the Bloomberg report is quick to highlight how many also worry this is just the latest example of Google's inevitable shift from risk-taking disruptor, to a notably blander legacy-turf-protection machine:

"These changes have prompted many in Silicon Valley to accuse Page of bowing to investor pressure—in other words, of acting like a CEO of a normal, publicly traded company. “It definitely looks like a more conventional company,” says Randy Komisar, a partner at Kleiner Perkins Caufield & Byers. “It’s the classic GE conglomerate model,” he says, comparing Page to Jack Welch, famous for turning General Electric around by shedding research divisions and slashing costs."

With the incoming Trump administration making it very clear the goal is to defang and defund the FCC, Google Fiber's path could get even more complicated in the form of fewer regulatory allies in the fight against incumbents. While the Google Fiber shift to wireless could still pay notable competitive dividends, it's still entirely within the realm of possibility that Page and friends get bored with Google Fiber entirely in a few years, leaving the effort as just another footnote in the never-ending quest to bring something vaguely resembling real price competition to bear on Verizon, AT&T, Comcast and Charter.

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Filed Under: access, broadband, competition, fcc, google fiber, larry page, moonshots
Companies: google

30 Comments

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Jeremy Lyman (profile), 22 Dec 2016 @ 5:26am

Proof is in the Pudding.

Trump administration making it very clear the goal is to defang and defund the FCC, Google Fiber's path could get even more complicated in the form of fewer regulatory allies in the fight against incumbents.

With fewer rules and regulations we will see TONS of new competitors pop up in the completely free market! Right? Unless, maybe there's some fundamental preexisting barrier to entry in this market, keeping incumbents up and innovation down...
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Lord Lidl of Cheem (profile), 22 Dec 2016 @ 6:24am

Cable Companies 1 : Google 0

Any company's that beat even google into submission should be looked at very closely...
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Richard Ahlquist, 22 Dec 2016 @ 6:35am

And....
And the 500 lb gorilla rolls over and plays dead. Great.
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Anonymous Coward, 22 Dec 2016 @ 6:52am

Re: Proof is in the Pudding.
barrier to entry is the most basic reason that regulation gets in.

Regulation...
Governments love it because they gain power...

Businesses say they hate it, but they love it because they buy law and make it more difficult for new competitors to "start-up" creating that barrier.

Citizens love it, but spend a lot of time bitching about it, and STILL ask for more when it fails while watching both business and government dragging their asses away from the table at discussion time!
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Anonymous Coward, 22 Dec 2016 @ 6:53am

Re:
Classic misdirection...

Look at the regulators, not the cable companies!
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Anonymous Coward, 22 Dec 2016 @ 6:56am

Typical Google
Yet another abandoned project.
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Mel, 22 Dec 2016 @ 6:57am

The Rise And ...
So is this going to be it? The Rise and the Vague Wandering Away of the Great Individualists? Who knows? Maybe even Trump will wind up like this.
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Vincent Clement (profile), 22 Dec 2016 @ 7:01am

Re: Re:
The 'regulators' don't write the regulations on their own. They get help from the cable and phone companies.
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Anonymous Coward, 22 Dec 2016 @ 7:29am

Re: Re: Re:
Looking at the businesses does nothing but tell us what we already know.

Since a regulator is around, that is the ONLY place worth looking cause we have to ask why they have continued to allow this to happen.

And while I can appreciate that regulators should be involved with the businesses they regulate, they should not be needing any help writing regulations. If they do, then its time to fire them and find more competent regulators.
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Lord_Unseen (profile), 22 Dec 2016 @ 7:41am

Re: The Rise And ...
This is what Google does. They're like the corporate version of that guy who has a dozen half-finished projects in his garage. They start something and do well with it until it gets too tough/boring and then they quietly abandon it. I fully expect that to happen to Gmail some day.
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Anonymous Coward, 22 Dec 2016 @ 7:48am

Re: Re: Proof is in the Pudding.
Yep, the government created the monopolies/duopolies, the corporations captured it through regulatory capture and then the sheeple run to the government for salvation. Meanwhile, the government is fat, rich and happily at the center of it all. Nope, no problem there.
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Anonymous Coward, 22 Dec 2016 @ 7:53am

Re: Re: Proof is in the Pudding.
It will be interesting to watch the attempts at defending their position on net neutrality while at the same time claiming that there is no barrier. What is hilarious is when they attempt to claim the market is competitive, lmao.
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Anonymous Coward, 22 Dec 2016 @ 7:54am

Re: Re: Re: Proof is in the Pudding.
I think you are missing a few bullets at the top of you power point presentation.
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OldMugwump (profile), 22 Dec 2016 @ 7:55am

Google has something better coming
Google didn't start Google Fiber out of pure beneficence.

They did it because Google has a huge interest in seeing the entire world get cheap broadband - the better to consume Google's services with.

That hasn't changed.

If they're dropping it now, it's because they have a better way to get to the same goal.

Possibilities: Mesh networking, Project Loon, SpaceX's 4500 satellite Internet project (Google is an investor in SpaceX), drone-relayed Internet, fixed wireless.

Given SpaceX's recent FCC filing (http://www.businessinsider.com/spacex-internet-satellite-constellation-2016-11), I'll bet on that one.
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art guerrilla (profile), 22 Dec 2016 @ 7:57am

Re: Typical Google
i was just going to say, just like fickle googs to abandon something just when it becomes popular/interesting...
used to be a big googs fan, now, not so much...
seems like page/schmidt/et al's long game was to capture the private panopticon franchise, and then milk gummints (if not effectively subsume them) with goog's unique access/data of EVERYONE...
NSA ? are you kidding me ? googs don't need no steeenkin NSA...
the NSA has to go to some lengths to siphon up everything; with googs, WE do all the work for them, and submit it all 'willingly' (for certain definitions of willingly)...
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art guerrilla (profile), 22 Dec 2016 @ 7:58am

Re: Re: The Rise And ...
you insensitive clod ! ! !
i have at least a dozen unfinished projects that i insist are not abandoned, simply ripening...
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art guerrilla (profile), 22 Dec 2016 @ 8:04am

Re: Google has something better coming
yeah, but...
i believe they specifically mentioned the wireless initiative, but -again, given their fickle nature- how long after they start *that* project, until it gets abandoned, sold off, whatever ? ? ?
frankly, googs deserves NO 'TRUST' they will not do so, for the obvious reason they are a company who does whatever the fuck the big dick swingers want it to do; BUT ALSO, because they have shown their ass in this fashion repeatedly...
finally, as a get-off-my-lawn statement: i would rather have a physical, fiber network in the ground, then an ephemeral wireless system entirely under the control of The They (tm) which can disappear, be filtered/blocked, or be rendered useless by any number of phenomenon which do not affect fiber in the ground...
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PaulT (profile), 22 Dec 2016 @ 8:07am

Re: Re: The Rise And ...
"They're like the corporate version of that guy who has a dozen half-finished projects in his garage"

Yep, but that guy has a day job and doesn't have any expectation of profit or other benefits from his weekend tinkerings. Occasionally he gets one working that he can put working for him during the day, but he's got better things to do than play with things that no longer interest him just because they once did. That's really what's happened here. A fun project with lots of profit potential has turned into a boring money pit, so it's been left aside.

What should be concerning here is not Google being deterred and deciding to try other projects. The problem is if Google can't really get anywhere significant with its available resources, then how the hell would any other competitor have a chance of even thinking about starting up in this sector?

"I fully expect that to happen to Gmail some day."

Not unless something major happens in market conditions. Under current conditions, GMail isn't something that's being tinkered with in the garage, it's a big part of the day job that's paying the bills.
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PaulT (profile), 22 Dec 2016 @ 8:09am

Re: Google has something better coming
Google have mentioned something about switching to wireless rather than messing around with fibre, I believe. It's also possible that they've lost the taste for the ISP side of the equation and would rather work with existing ISPs to leverage connectivity in other ways.
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Anonymous Coward, 22 Dec 2016 @ 8:55am

Google Fiber is a new...
Picasa. Panoramio. Nexus. Ara. Wave. Buzz. Desktop. iGoogle. Knol. Talk. Reader. Orkut. Labs. ...

No idea if google sees it, too, but it becomes a bit of a problem to base your business on google services, that might disappear all of a sudden.
Just imagine choice between AWS and google cloud. It is a pain to change a provider, so would you rather choose one, that might "get bored" and close the service, or one, that is less likely to do so?
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Anonymous Coward, 22 Dec 2016 @ 9:32am

Re: Re: Google has something better coming
The initial investment must be protected. If another competitor can easily enter the market with a cheaper and better alternative, the incumbents are unable to get to their ROI-goals. Also, the ISP-side is screwed pretty well generally: They are more or less invested in the internet backbone, DNS, WAN-leasing, routing and a plethora of other elements completely out of their control and they will get the blame regardless.
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Anonymous Coward, 22 Dec 2016 @ 11:22am

It's sort of sad. Just a few months after Google Fiber was officially announced for my city I have an AT&T Fiber connection at my house and another company is laying fiber in front of my workplace as I type this. The disruptive force is very real, even if their implementation goes slower than they would like.
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Anonymous Coward, 22 Dec 2016 @ 12:49pm

Re: Google has something better coming
"Pie in the sky".
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Anonymous Coward, 22 Dec 2016 @ 2:55pm

Re: Proof is in the Pudding.
REALLY think you will see MORE companies pop up to take advantage??

NOPE..
most of the market is BOUGHT UP..as well as, if a SMALL company DOES take hold..they will either, BE BOUGHT, RAIDED, TERRORIZED, SHOT...Or just CUT OFF from access to the net..
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ECA (profile), 22 Dec 2016 @ 3:03pm

Anyone see a HOLE is all this??
There IS' a hole in most of this..

There is a section of the net, that the BIG GUYS dont pay attention to..
(really there are 2)
#1...
The net was setup to run along the freeways..to all the SMALL towns..Allot of small companies have popped up and taken hold.. Taking AREA's around the freeway would be easy, and QUICK..

#2...
BECOME a TIRE 1, system..ISP's are generally tier 3 systems..90% of all the LOCAL areas are serviced by TIER 3.. Unless you are a major CORP or a SERVER SITE...its all TIER 3.. TIER 1, installs the MAIN lines from here to there, and STILL runs along the freeways...
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David (profile), 22 Dec 2016 @ 5:06pm

Page is the problem, not the cure.
What google fiber was doing was the right thing to do. Page just doesn't have a sufficiency of spine to follow through.

To disrupt the telecom business my suggestion is to build a different internet. I call it google.net. Sell me a device, by pass Comcast, ATT, TWC, and pals ad nauseam by connecting me to your server solution. Just give me a connection, over fiber, over wireless, over the old TV bandwidth. Sell me a box that lets me login to google.net and tell everyone else to fuck off.

That would be disruptive.

Maybe not enough for Page. It might be enough for Sergey Brin though. He understands scale.
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Name Here, 23 Dec 2016 @ 4:02am

Re: Page is the problem, not the cure.
Google will try to bury this by blaming the incumbents, but the reality is much simpler:

Someone figured out the return on investment was really, really, really bad, and that the time to get a return was insane. Like many of their other moonshot projects, this one was a huge sinkhole for cash, and showed little promise of being anything other than a digital money pit.

I also think that the Google data crunching nerds figured out that the actual extra income from having these people hooked up to Google Fiber wasn't enough to justify it either.

Basically, Google figured out after spending a huge pile of money what most others figure out before they start: There isn't a whole lot of return in being a startup ISP.
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Chahk (profile), 23 Dec 2016 @ 10:42am

Re: Google Fiber is a new...
Exactly. Last year I switched to Project Fi for my wireless service and transferred my cell number to Google. I love the service (and the price) but I'm starting to get anxious about the very real possibility that Google abandons this project just like all the others on that list.

Is there a name for this? How about "Google Abandonment Syndrome"? G.A.S. seems like a fitting acronym.
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Anonymous Coward, 25 Dec 2016 @ 2:00am

Re: Re: Page is the problem, not the cure.
Contrary to your assertion, I'm pretty sure Google would have looked at the numbers beforehand.
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Seth Dobson, 16 Jan 2017 @ 1:12pm

Charlotte, NC Google-Fiber,smoking while marking townhome by back window, Ongoing problem with USIC hanging out (utility locator for Fiber Optic) on property
For over a month and a half at my home in Charlotte, NC , USIC has been sitting in the parking area for hours, sometimes never getting out of trucks, trying to incite residents by backing into spaces next to their home, painting and repainting lawns without any notice or permission, stomping on grass flagging and reflagging over and over again.
In all conversations with and voice mails from Google-Fiber they said they checked with their construction crews and were told they weren't working in the area. Very misleading at best, USIC has flagged and marked some of the homes multiple times. Google-Fiber flyer finally on my door last week and they started to dig here near the entrance today. The response from Google when it arrived, "when did you get the flyer, where did they mark?" S&N Communication trucks (Google's construction contractor) are also on the property today. In the marking in the back today, which has been done at least four times before, two men (from USIC trucks) were smoking and the lit cigarette was thrown to the ground.
Google Fiber Construction Information Hotline: 877-454-6959

In all conversations with and voice mails from Google-Fiber they said they checked with their construction crews and were told they weren't working in the area. Very misleading at best, USIC has flagged and marked some of the homes multiple times. Google-Fiber flyer finally on my door last week and they started to dig here near the entrance today. The response from Google when it arrived, "when did you get the flyer, where did they mark?" S&N Communication trucks (Google's construction contractor) are also on the property today. In the marking in the back today, which has been done at least four times before, two men (from USIC trucks) were smoking and the lit cigarette was thrown to the ground.
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