Google Fiber Is Changing Its Strategy as Costs Grow

Google is taking a strategy timeout on its high-speed-internet business. According to WSJ, the Google Fiber unit is — including Los Angeles, Chicago, and Dallas — after its initial rollouts proved time-consuming and expensive than anticipated — is rethinking how to deliver internet connections in about a dozen metro areas (could be paywalled; alternate source). From a Fortune report: Turns out it is very expensive to run wires — or in Google’s case, fiber optic cables — to each and every house that wants service. Known as the “last mile” problem, the high costs, in turn, make it difficult for companies to earn a solid rate of return on the installation investment. Google’s effort, through its unit called Fiber that launched in 2010, is now seeking alternative means to connect to consumers homes or finding other people to pay the cost. Google has sought deals with municipalities and power companies to pay for the connections and is also exploring less expensive wireless technology. Meanwhile, Google has suspended efforts to add new cities such as San Jose, Calif., and Portland, Ore., using its prior strategy of stringing up cables to each customerâ(TM)s home.

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