Silicon Valley drops off of Google Fiber roadmap

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Google has scrapped seemingly imminent plans to start laying fiber in Silicon Valley. According to a story yesterday in the San Jose Mercury News, Google has told officials in Palo Alto and Mountain View that the project is on hold, and the group that was to do the work has been disbanded…

The company was set to begin digging in San Jose last month, but nearly 100 employees hired to install Google Fiber were pulled into an office and told the project was being delayed, according to workers. They were offered a transfer to San Diego to work on an unrelated project.

The reasons given to the Mercury News are nearly identical to the statement Google made when it similarly pulled out of Portland

Google Fiber spokeswoman Veronica Navarrete said company officials will continue talks with San Jose, Palo Alto, Santa Clara, Sunnyvale and its hometown of Mountain View about providing internet service, but added that it “takes time” to deploy “the latest technologies in alignment with our product road map, while understanding local considerations and challenges.”

The latest technologies Google is considering include, maybe exclusively, wireless, the fruits of its acquisition of Webpass. On parent company Alphabet’s second quarter 2016 earnings call last month, chief financial officer Ruth Porat confirmed that Webpass’ wireless is now part of the mix at Google Fiber, and they are “continuing to push the frontier” with “different execution paths”.

Porat also said that total capital investment in what Alphabet calls its “Other Bets” was $280 million in the second quarter, “primarily reflecting ongoing investment in our Fiber business”. With the tab for building out a full fiber network in Silicon Valley looking like ten times that figure or more, and no end to operating losses in sight, Google’s cold feet come as no surprise.