Google Fiber is in talks with at least two municipalities in Idaho and around five in Nevada, as it looks to add both states to a list of expansion markets it is targeting for the coming years, the operator’s GM of Expansion Markets Mark Strama told Fierce. The comments came as Strama discussed the strategy behind Google Fiber’s recently announced growth plan in an exclusive interview this week.
After spending several years fleshing out coverage in its existing markets, Google Fiber in August outlined plans to extend its reach into five new states over the coming years: Arizona, Colorado, Nebraska, Nevada and Idaho. Already, it has struck right of way access deals with cities in three of those states, with Nevada and Idaho the outliers.
Strama said Google Fiber still hopes to land in all five states. But he acknowledged “It’s never a given for us that the place we want to expand we’ll be able to expand to.” There are two reasons for that, he said. The first is that because it’s no longer a video services provider – which would automatically entitle it to right of way access in most places – it has to negotiate access agreements in “a way that many cities haven’t done before.”
The second relates to its preferred construction method of micro-trenching. Most municipalities have older policies in place which require construction at a depth of 30-inches or deeper – which is more suitable for a technique like directional boring. But micro-trenching involves cutting thin channels 6 to 24 inches deep into roadways and other rights-of-way in which to lay fiber. That means Google Fiber has to ask cities to adapt their ordinances to allow it to build at a shallower depth.
Google Fiber’s micro-trenching strategy notoriously went wrong in Louisville, Kentucky, where it went too shallow and ended up having to shut down its network there. Strama said it openly discusses that failure with municipalities to show what it has learned in the years since. He added that after the Louisville incident, Google Fiber “did a lot of R&D” and believes it now has a solution that should work in every city it talks to.
As Google Fiber evaluates potential expansion targets, Strama said it’s not looking so much at population as it is at housing density.
“We do a pretty complicated analysis of cost of construction and housing density to see whether it meets the criteria that would enable us to pay back the investment,” he said. “It’s when homes are sparse that you have to build lots of linear footage to get to a customer…we have to make deployment of the network affordable.”
In terms of where exactly in Idaho and Nevada it’s looking, Fierce previously identified Boise as a potential target based on a letter Strama wrote last year in support of a middle mile grant application filed by the city. But Strama told Fierce there are a “surprising number of communities in Idaho” that meet the aforementioned density requirement for it to consider expansion. Specifically, he noted there are “areas that are reasonably proximate to our Salt Lake City operation that have the housing density we need to expand there too.” Looking at a map, Idaho Falls, Pocatello and Twin Falls – which are the fourth, sixth and eighth largest cities in the state – are all located roughly in the southeast corner of Idaho to the north of Salt Lake City.
In Nevada, he said the five jurisdictions Google Fiber has engaged with are all in the same metro area. Though he didn’t specify which metro, Las Vegas Valley has five licensing jurisdictions while Reno is divided into five city council wards.
Google Fiber used GPON technology for its original fiber builds but is planning to use XGS-PON in all its expansion markets. Over time, it will eventually upgrade its older markets to XGS-PON as well. It seems West Des Moines, Iowa; Kansas City, Kansas/Missouri; and Salt Lake City and Provo, Utah were the first legacy markets to be upgraded, given Google Fiber just launched a symmetrical 5-gig offering in those cities.
But it’s not stopping with XGS-PON. A Google Fiber representative confirmed it is trialing 25G PON technology from an unspecified vendor. The verification comes after the operator in September said it achieved speeds of 20.2 Gbps in a network field test conducted in Kansas City.
To date, Google Fiber hasn’t revealed much detail about the inner workings of its business. Specifics around total passings, subscriber numbers, revenue and capital expenditures remain something of a mystery. But here’s what we do know.
Google Fiber is lumped into parent company Alphabet’s Other Bets reporting segment with other businesses that are not individually material to the company’s overall financials, including Verily, Waymo and X. For the full year 2022, Other Bets posted revenue of $1.1 billion and an operating loss of $6.1 billion.
While Strama declined to shed light on the company’s metrics, he made one thing clear: Google Fiber’s expansion is self-financed. That is, it has not and is not planning to apply for any subsidy funding from state or federal government programs.
That’s at least in part likely because Google Fiber isn’t really interested in tackling the rural areas those funding opportunities are targeting. “At this point, most of our focus is on urban and suburban areas that allow us to build without subsidy,” he said.
Excluding its fixed wireless access Webpass service, the company has 12 existing metro markets: Atlanta, Ga.; Raleigh-Durham and Charlotte, N.C.; Huntsville, Ala.; Nashville, Tenn.; West Des Moines, Iowa; Kansas City, Kansas/Missouri; Austin and San Antonio, Texas; Salt Lake City and Provo, Utah; and Orange County, Calif. Just south of Los Angeles. It has also announced plans to expand into Mesa and Chandler, Ariz.; Lakewood and Westminster, Colo.; Des Moines, Iowa; and Omaha, Neb. Those expansion markets will be in addition to the forthcoming targets in Nevada and Idaho which have yet to be announced.
Data from the Federal Communications Commission's new broadband map shows Google Fiber's service was available at 1,002,197 serviceable locations across the country as of June 2022.
Fierce pressed the operator to share up to date details about its revenue and subscriber metrics in an email follow up to the interview with Strama and will update this story if more information is provided.