Limited potential.
Google is putting the brakes on its fiber builds. That seems to be the word out of Portland. According to a story in the Oregonian, contractors involved in the project – or at least who think they’re involved – say that construction won’t begin for several months, if ever. Google Fiber hasn’t actually said that Portland is one of its chosen few markets, but the general expectation was that an announcement to that effect would come in the fall.
The explanation a Google spokesman gave to the Oregonian indicates that the company is reevaluating its technology options…
“We’re continuing to explore the possibility of bringing Google Fiber to Portland and other potential cities,” Google wrote. “This means deploying the latest technologies in alignment with our product roadmap, while understanding local requirements and challenges, which takes time.”
In the context of Google’s recent purchase of Webpass, which does most of its business wirelessly, the term “latest technologies” doesn’t point to, say, slimmer fiber cables. More likely, it indicates a cost-benefit analysis is underway. The capital cost of installing fiber in major metro areas is huge, even by Google standards – the Oregonian puts a $300 million price tag on a Portland build.
Here in California, the tab would run even higher. The estimate for San Jose alone was in the gigabuck range and you can multiply that a few times to cover the rest of the Silicon Valley cities Google has been trawling. San Francisco is now listed as an upcoming Google Fiber city – in contrast to San Jose’s and Portland’s potential status – but that also points to a shifting business model. Google plans to lease other people’s fiber to reach multiple dwelling units there, and the Webpass acquisition complements that strategy.