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Google Fiber Runs Into Reality—Then Begs For Taxpayer Support

May 4, 2017

Last October, Google Fiber announced that it would to cut nine percent of its staff and reduce the number of cities in which it would build high-speed internet systems. The company acknowledged that it simply had found that it’s very expensive to build gigabit Internet Service Providers (ISPs), even in densely populated areas. 

Then-CEO Crag Barratt, who left the company not long after the October announcement, said the company would continue moving forward in cities where construction had begun, but in cities where construction was not yet underway, the company would “pause” its “operations and offices while” it “refine[d]” its approach.

Thanks to The Wall Street Journal’s Jack Nicas and Fortune Senior Writer Aaron Pressman, we now have a little bit more information about what the company meant by “refine.”

Turns out it meant seeking taxpayer-provided subsidies and other advantages. Fortune’s Pressman explains that “Google has sought deals with municipalities and power companies to pay for the connections and is also exploring less expensive wireless technology …” Or, as The Wall Street Journal put it, the company is “asking cities or power companies to build the networks instead of building its own.” The Journal said, “The new strategies are in response to the headaches of building a fiber network.”

Huntsville, Ala. is one city that’s already agreed to Google Fiber’s scheme. Additionally, as The Wall Street Journal’s Nicas noted, in Tampa, Fla., “Google Fiber is in talks with a power company to build the fiber network.”

What is not clear based on the Fortune and Wall Street Journal articles, is the relationship between Google Fiber and Louisville, Ky. Google Fiber announced in late April that it is moving forward with plans to build in that city. Just one day later, Louisville’s mayor announced that he wants to spend $5.4 million to build broadband infrastructure—that Google Fiber could use.

Google Fiber’s parent company, Alphabet, somewhat acknowledged that part of its strategy is to depend heavily on local taxpayers. In a statement to The Wall Street Journal, the company said, “We’re continuing to work with city leaders to explore the possibility of bringing Google Fiber to many cities. This means deploying the latest technologies in alignment with our product road map, while understanding local considerations and challenges, which takes time.”