By Nicholas Van Zandt
For the past six years, Alphabet, the parent company of Google, has struggled to achieve its very lofty goal of competing against the cable and telecommunications giants in their effort to roll out high speed fiber optic internet networks. On October 26, 2016 they announced what they were calling a “strategy shift”, but was more of a sizable curtailment of the program entirely.
In their announcement, Alphabet stated that their expansion would be significantly curtailed and they would be reducing the staff in that business unit. Furthermore, the chief executive overseeing the Google Fiber division stated that he was planning on stepping down so that the company could focus instead on new technologies and deployment methods for their high-speed internet. No replacement leader was announced.
While Google does has not released the financials for the fiber optic project, there have been numerous reports that the expenditures related to this business unit were excessive due to the costs involved with digging up the ground to lay the cable and having to pay to connect homes to the network even if those homes do not subscribe.
It would appear that this decision comes after several years of facing cost overruns that the company could no longer support. These costs, which one might have assumed that a company like Google could of foreseen, have apparently required the company to scale back operations and it is unclear if the full fiber optic plan will move forward. Google, for its part, has suggested that their real goal was not to profit from this project, but instead to motivate the existing internet providers to move faster in their own implementations of high speed internet.