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Google Says Fiber Internet Service Lives On Despite Cuts

October 28, 2016, 1:53 PM UTC
Google Brings Quirk And Clout To New DC Digs
A Google Inc. Fiber display is shown at the Google office in Washington, D.C., U.S., on Tuesday, July 15, 2014. Google's presence in Washington is necessitated in part by the Federal Trade Commission and U.S. Justice Department inquiries into how the company obtains and uses private data. Additional privacy and safety concerns are likely to arise from Google projects in the works, including nose-mounted Google Glass computers and self-driving cars. Photographer: Andrew Harrer/Bloomberg via Getty Images
Photograph by Andrew Harrer — Bloomberg via Getty Images

Google Fiber, the search company’s groundbreaking if over-ambitious home Internet service, announced several setbacks this week. CEO Craig Barratt departed as a further expansion into eight more cities was indefinitely delayed.

The news followed many prior, unconfirmed reports of challenges at the fiber unit, including delays, cost overruns, and lagging subscriber growth.

But while some rivals have declared the effort dead, one of the chief internal critics pushing for more financial responsibility at Fiber (and all of the other unprofitable ventures within Alphabet for that matter) came to its defense on Thursday night.

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Alphabet (GOOGL) CFO Ruth Porat, who joined the tech giant from Wall Street firm Morgan Stanley to infuse it with more financial discipline, said the fiber project is still “very active” despite the recent issues. In the third quarter, the project expanded to four more cities, making a total of 12 regions where consumers can sign up for super high-speed Internet.

“We’re making great progress in those cities and we remain committed to growth in those cities,” Porat said on the company’s quarterly call with analysts. “We’re pausing for now our work in eight cities where we’ve been in exploratory discussions. But very much to your question, it’s to better integrate some of the technology work we’ve been developing.”

Porat said Google Fiber needs to “focus” more on possible new technologies before adding more cities. “It was about ensuring that we can take advantage of those before again pushing forth,” she said.

In August, Google filed with the Federal Communications Commission to try a high-band wireless solution in up to 24 cities around the country. In theory, using the wireless technology to send Internet signals would be cheaper than wiring up individual homes. But high-band signals do not travel far and have difficulty penetrating deeply into buildings.

Google Fiber holds off on expansion.

Google hasn’t disclosed how many customers its Fiber unit has or any specifics about its financial results. The unit is lumped in with many projects as parts of the company’s “other bets,” which had revenue of $197 million and generated an operating loss of $865 million in the third quarter.