Thursday, July 21, 2016

Google Fiber Hits Pause in Portland Market

Google Fiber has put its plans to build a fiber access network in Portland in the fall of 2016 on at least temporary hold. “Why” is the question everyone should be asking.

In principle, Google Fiber could be wrestling with the business model, as competitors Comcast and CenturyLink have themselves been upgrading their own networks in the Portland area. That might make for a more-difficult payback model.

CenturyLink, for example, already is gigabit services in Portland, as does Comcast. That arguably makes harder the business model for Google Fiber or any other ISP that might be contemplating entering the Portland market.

It will not be so easy to attack as the only provider of 1 Gbps service if the other two leading ISPs already are doing so.  

"We're continuing to explore the possibility of bringing Google Fiber to Portland and other potential cities," Google says. "This means deploying the latest technologies in alignment with our product roadmap, while understanding local requirements and challenges, which takes time."

Also, it might be reasonable to assume that Google Fiber is about to try and become “Google Internet” and use fixed wireless as the access platform, not optical fiber.

That would be a major development. Facebook, AT&T and Verizon are other entities expected to promote or use fixed wireless as a major access platform for Internet access, and eventually gigabit access services.

Personally, I think Google Fiber has looked at the numbers and concluded a gigabit network that might cost $300 million is simply too big a risk in the existing Portland market, compared to its potential prospects several years ago: before CenturyLink and Comcast moved to upgrade.

This could be the leading edge of a very big change in access strategy and business models.

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