Company / division: Google Fiber
Google Fiber is rolling out in San Antonio and Louisville, two markets to which the company committed to before halting expansion, but won’t be offering pay TV service in those markets alongside its broadband service. That’s a first, as Google Fiber has always offered broadband and TV (though not always phone service) in its previous markets, in keeping with the most popular pairing of services taken from cable and telecoms operators. The reality is that Google Fiber TV wasn’t nearly as popular as its broadband offering, with just over 80,000 subscribers at the end of 2016, a small fraction of its broadband base, which is thought to be in the high hundreds of thousands at this point. Besides that, the economics associated with pay TV, especially for smaller providers, are not that attractive, with much of the revenue being passed straight through to channel owners and little opportunity for real differentiation. So, with all that as context, it makes perfect sense for Google to drop TV from its bundles and go purely for the broadband market, where its differentiation is far stronger, and where the economics should be quite a bit better. With the launch of YouTube TV in many markets, Google even has its own streaming TV service to offer now too.
, via 9to5Google
Google Loses Another Fiber CEO, After Five Months on the Job (Jul 18, 2017)
After years waiting for Google Fiber, KC residents get cancellation e-mails – Ars Technica (Mar 20, 2017)
In some ways, this story is far from surprising – Google has publicly announced a scaling back of its Fiber activities, supposedly in favor of new technologies. However, in theory it’s also still committed to the small number of markets where it’s actually rolled out service, including Kansas City. And indeed a statement towards the end of this piece suggests Google is still rolling out fiber in new areas. What I suspect is happening here is that Google is cherrypicking the most attractive neighborhoods while scaling back on others, just as other providers have done (just in the past two weeks, I’ve commented on stories relating to AT&T and Verizon around this very problem). Selectivity about where to roll out was always a facet of Google’s Fiber strategy, and for every provider who does this that’s based on a calculus on how much rollout will cost, what percentage of households will buy the service, and how much they’ll spend on average. That then leads to a determination about which houses are worth serving based on some pre-determined threshold for profitability over a certain period of time. I’m guessing that what’s happened here is Google has just raised that threshold by another notch, putting some homes that once made the cut out of the running now, hence these cancelations. Which would make it another symbol of increased financial discipline and belt-tightening at Alphabet.
via Ars Technica
Google Fiber and Alphabet’s broader Access unit within which it sits has been somewhat in limbo since late last year, when it lost its leader and canceled all its expansion plans. The story the company told then – and still seems to be telling today – is that it intends to pursue the same goals in new ways, principally through wireless. The fact that a new head has actually been appointed means that it’s at least somewhat serious about that goal, and isn’t just going to sell off or shut down the whole business, but it’s still possible that it might sell its fiber assets even if it pursues wireless technologies in future. Meanwhile, I still don’t think there’s a good reason for Google to be in the access business at all at this point.
The headline here is overblown – Facebook, Google, and many other over-the-top services have already eaten into telcos’ business, but end user Internet access remains pretty inviolate as a telco domain. This piece skims over that element very quickly, without addressing any of the big barriers to entry that exist. I’ve no doubt that some of the other changes discussed will occur, but that’s the big one that’s going to keep telcos relevant and even healthy going forward.
Uber asked a lot of Pittsburgh for its self-driving cars, and offered back very little — Quartz (Dec 29, 2016)
As I’ve said previously, Uber has a pretty complex relationship with the municipalities where it operates, often flouting taxi regulations and more recently also self-driving ones. In the case of Pittsburgh, Uber has at least worked with the city, but it now appears that it has been something of a one-way relationship. Ironically, the dynamic here is reminiscent of that between Google Fiber and cities, in which the latter have bent over backwards to help Google, whereas in autonomous driving Google (now Waymo) has been more cooperative, while Uber borrows its Fiber playbook.
Why Google Might Sell Its Fiber Business — The Information (Dec 28, 2016)
Alphabet has been tightening its belt as regards the Other Bets ever since Ruth Porat came onboard as CFO. Fiber has already been pared back and its expansion plans put on hold, but this article suggests it will be spun or sold off entirely, which seems entirely plausible. There’s never been much synergy between Fiber and the rest of Google/Alphabet, and it’s arguably served its purpose.