Why Google Fiber Failed to Disrupt the ISPs

The week of July 17 brought more bad news for Google Fiber, the search giant’s troubled bid to become a powerful internet service provider. On July 18, Greg McCray stepped down as CEO of the company’s ISP business (now formally housed under Access, a subsidiary of Google parent company Alphabet). His departure comes just nine months after Craig Barratt left the same role. Meanwhile, the Access division has faced staffing cuts, and aggressive plans to expand to more cities are on hold indefinitely.

Google Fiber began as an experiment, then briefly seemed poised to grow into a legitimate contender against the ISP incumbents. But today it serves as proof that providing high-speed wired internet is a losing proposition, even for one of the world’s wealthiest companies. The lesson Google is learning is one that the major ISPs already figured out: Providing traditional broadband internet isn’t a great way to make money in 2017, no matter how fast it is. Home broadband adoption has plateaued in the United States as some Americans opt to simply use their phone’s data plans to go online. That’s one reason why the major ISPs, from Comcast to AT&T to Verizon, have focused their efforts on acquiring content providers like NBCUniversal, Time Warner, and Yahoo in recent years.