Google Curbs Expansion of Fiber Optic Network, cutting jobs

When Google underwent corporate restructuring in 2015, the ever-so-popular search engine company formed an umbrella company, Alphabet. That same year, Alphabet’s company value even surpassed prominent hardware and software mainstay Apple.

A year later, Google’s parent company, Alphabet, is now restructuring. According to a New York Times article published in October 2016 by Daisuke Wakabayashi, the company is “signaling a strategy shift for one of its most ambitious and costly efforts; bringing blazing-fast web connections to homes across America.”

The article also stated that Alphabet announced “it was curbing the expansion of its high-speed fiber optic internet network and reducing staff in the unit responsible for the work,” but did not provide numbers on the amount of jobs to be cut.

This shift also lead Chief Executive of Access, Craig Barratt, to step down; halting new technologies and methods of deploying high-speed internet.

The American multinational conglomerate Alphabet was founded in October of 2015 by two Google founders, Larry Page and Sergey Brin, in Mountainview, California. The company’s portfolio includes varying industries, everything ranging from technology, life sciences, investment capital and research. According to the founders, their name is two-fold. The same alphabet — a collection of letters making up a language, which we’re familiar with — is the core of how Google works and it also signifies the meaning of alpha: investment return above benchmark.

Google Fiber was introduced to the market in 2010 and was in an effort to compete against cable and telecommunications operators, who had great pull in the consumer internet market. Fiber optic internet and television became offered in eight metro areas including Atlanta, Nashville and Salt Lake City. The service costs $70 a month for internet and $60 for television. While the service will likely remain in current cities, the additional potential outlets of Dallas, Los Angeles and the Phoenix expansion will be halted.

While Alphabet surpassed Apple’s value in 2015, the shift did not last long; as Apple once again took its place at the top of the most valuable companies. The recognizable fruit-icon computer giant is well on its way to becoming a trillion dollar business, constantly being at the front end of Forbes and Fortune 500 lists.

Local Capitol Macintosh owner, David Smith, admits internet is not their area of expertise, although Apple computers are. And for most, these two go hand-in-hand. Smith spoke about the restructuring of Alphabet.

“It seems that Google has realized how expensive it is to install the infrastructure — wires/cables from the source to destination (home and/or business), government permitting, digging across roads, traversing pipelines, maintenance of the lines,” Smith said. “And then getting customers to sign up and pay for a very high speed network.”

The Google Fiber is just a single aspect of Alphabet, and a costly one at that. “The fiber business accounted for the bulk of $280 million in quarterly capital expenditures — money spent on things like equipment,” as stated in The New York Times.

Internet is a very valuable tool in today’s workforce, even in comparison to the new millennium statistics. In 2000, the Pew Research Center found nearly half (48 percent) of American adults did not use the internet. Today, only 13 percent of U.S. adults aren’t going online, according to a Pew Research Center analysis from September 2016. The trend continues to catch on with new generations, especially with government and social service programs encouraging and utilizing online applications rather than prior, dated methods of completion.

From the data found, analysis showed that cost was a barrier, with 19 percent of U.S. adults listing the expense of internet service or computers as keeping them from utilizing the World Wide Web.

Smith is well aware of the cost factor. “Yes, we all want high speed internet; but at what price point?” he questioned.

The world continues to advance and the World Wide Web rides the newest, latest, greatest, fastest wave of technology. Smith spoke about the advances and likely future of the industry.

“Wireless transmission is where the industry is heading as speeds ramp up faster every year,” he said. “There are still infrastructure costs, but they’re much lower and then, of course, making the sale to the end user — but that’s getting faster and less expensive every year (and more reliable).”

Although Google Fiber may be starting to unravel at the seams — and a planned restructuring will soon undergo Alphabet — one thing is for sure: technology companies continue to secure their spot in the market for the most connected, utilized and essential workplace tools.



Sarah Spohn

Sarah Spohn

Sarah Spohn received her degree in Journalism from Lansing Community College. She’s a concert junkie; living and breathing in both the local and national music scene. She is proud to call Lansing her home, finding a new reason every day to be smitten with the mitten.

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