Google Battles AT&T, Comcast Over Fiber Rollout In Nashville, Reportedly Plans To Cut Fiber Staff In Half
Google Fiber ran into trouble with the competition in Nashville this week, a development that has Google threatening to back out of its Nashville-area fiber system rollout completely.
The Internet giant was unable to reach an agreement with the legacy carriers in the region, AT&T and Comcast, regarding utility pole wiring policies. The standoff between Google and the two service providers comes on the heels of a report from The Information this week that Google parent company Alphabet's CEO Larry Page has ordered Fiber to slash its staff of 1,000 in half to about 500 employees.
While the channel is waiting to see if Google Fiber will be a viable connectivity option for their customers, some partners remain uncertain about Google's future in the telecom space.
[Related: Partners Weigh In On Google Fiber Impact As The Telecom Industry Arms Itself For Disruption]
The connectivity market is fraught with rules and regulations, an area that the incumbent carriers that are entrenched in the fiber arena already know well.
"Google has the money for fiber rollouts and they have a history of success supporting business users in other segments. But the connectivity space is a completely different business vertical for them, this is a completely different business venture for them," said Courtney Humphrey, CEO of Opex Technologies, a Raleigh, N.C.-based solution provider. "Our main concern is customer experience and how they will execute in this area, so it is a wait-and-see scenario for us."
In Nashville this week, Mayor Megan Barry’s office held negotiations between the three companies that ended without an agreement. Current Tennessee law requires a new service provider to tell the Nashville Electric Service to contact the other providers that use the same utility pole -- in this case, AT&T and Comcast -- that a new installation is being planned so that the incumbent carriers can prepare the poles for additional wiring, a so-called "make-ready" rule. Google requested that the rule be changed so that new entrants can more easily install their own wiring on shared poles. Google argued that current rules unnecessarily prolong the process of rolling out fiber lines to new locations.
AT&T and Comcast want the current rule requiring their own staffs be involved in the wiring be upheld, citing outage concerns during installation if Google were to make a mistake during the wiring process.
Google faced off with AT&T in Louisville, Ky., over the same issue. While Google won that battle, AT&T filed a lawsuit against the city over the new ordinance.
Google dove headfirst into the fiber communications market and has been giving legacy telecommunications and cable providers a run for their money by driving down fiber connectivity prices in certain geographies. Though it has a very limited geographic reach so far, many partners are interested in Google Fiber as another connectivity option for their end customers.
Opex Technologies' headquarters is in Raleigh, N.C., in an area Google is currently targeting for a fiber communications rollout. While Opex is waiting to see how Google plans on servicing business users, the solution provider is keeping an eye on Google Fiber availability and already has customers asking about the offering, Humphrey said.
"I think they will be a competitor to the cable companies, compared to the traditional network providers who deliver dedicated IP connectivity. [Google] is providing high-capacity, low-cost connectivity that is a great fit for the SMB space," he said.
Humphrey added that Google Fiber could also be a viable, cost-effective option for enterprise users who need diverse access and connectivity options for redundancy.
But Google's current issues are fueling speculation around the future of its Google Fiber plans. Google's aggressive plans involved signing up 5 million subscribers within five years. But according to The Information report, Google currently has around 200,000 Google Fiber subscribers. Google first rolled out Google Fiber in 2012.
Google has not confirmed reports regarding the downsizing of its Fiber business unit.
Alongside Google's recent strife in Nashville, the Internet giant recently postponed a fiber system rollout in San Jose, Calif., and is said to have shelved plans for a Portland. Ore., buildout.
Google Fiber is currently operating in nine metro areas, including Atlanta, Austin, Salt Lake City, and the site of its initial launch, Kansas City, Mo. and Kansas City, Kan.