Google Fiber's Silicon Valley Rollout Is Delayed

Google has told at least two Silicon Valley cities that it is putting plans to provide lightning-fast fiber internet service on hold while the company explores a cheaper alternative.

The news comes nearly three months after San Jose officials approved a major construction plan to bring Google Fiber to the city. Mountain View and Palo Alto also were working with Google to get fiber internet service but said Monday that the company told them the project has been delayed.

"It was a surprise," said Mountain View public works director Mike Fuller, who added that Google told city officials the company was still committed to providing fiber service in Mountain View. "We didn't expect it because we were working on what was their plan at the time."

Google Fiber was scheduled to announce its official launch in San Jose within months, but plans seemed to stall after the company obtained final permits in May to begin a three-year construction project. At the time, the company estimated that 60 percent of its cable network would be underground and 40 percent would be aerial.

The company was set to begin digging in San Jose last month, but nearly 100 employees hired to install Google Fiber were pulled into an office and told the project was being delayed, according to workers. They were offered a transfer to San Diego to work on an unrelated project.

"We were upset and wanted to know what happened," said fiber optic installer Salvador Bustamonte. "They said that Google was going to re-evaluate this whole project because they were thinking of going aerial."

Google's parent company, Alphabet Inc., recently acquired Webpass Inc., and is expected to adopt its wireless technology, which provides superfast internet service at lower costs without digging up city streets. Webpass' wireless approach involves sending aerial data between transmitters installed on top of buildings.

Google Fiber is already up and running in seven other major cities, outside California, but a source familiar with the project says the company is putting additional fiber locations on the back burner to reassess the technology and explore a cheaper alternative -- wireless service that does not require expensive, capital-intensive and time-consuming installation of fiber cables under the ground. The source said Google is now focusing more on aerial installation.

Google competitors including AT&T and Comcast have been blocking the company from accessing privately owned utility poles, which could provide a cheaper option than burying cable for fiber.

Google Fiber spokeswoman Veronica Navarrete said company officials will continue talks with San Jose, Palo Alto, Santa Clara, Sunnyvale and its hometown of Mountain View about providing internet service, but added that it "takes time" to deploy "the latest technologies in alignment with our product road map, while understanding local considerations and challenges."

Analyst Joel Espelien of The Diffusion Group said jack-hammering concrete to lay fiber cable never seemed to fit with Google's operations.

"Digging up streets is definitely not Google's thing," Espelien said. "Wireless is definitely much more kind of up their alley."

Some analysts see the delays as indications that Google Fiber is more strategy than product -- an attempt to get competitors, cities and other service providers to install fiber networks that would foster faster and more widespread consumption of Google's online offerings.

"It's not clear (Google was) ever all that serious about doing this at any real size," said MoffettNathanson Research analyst Craig Moffett.

San Jose leaders said Monday that they're hopeful Google's future plans -- even if services take a different shape or form -- will involve the city, especially after nearly two years of discussions over how to give residents faster connections.

"The fiber ball is entirely in Google's court," said city spokesman David Vossbrink. "We're very optimistic that their plans for extending their high speed broadband system will include San Jose, even if their original schedule gets modified so they can take advantage of technology advances that might be potentially less disruptive."

In Palo Alto, a city staff report said deployment of Google Fiber has been delayed "up to six months or more."

"Google indicated that they are exploring more innovative ways of deployment that overcome some of the challenges they are facing in their current builds," the report said.

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