Google Fiber holds off on Portland 1 Gig launch, may be exploring other service options

Google Fiber's (NASDAQ: GOOG) mission to bring 1 Gbps service to Portland, Oregon, has hit another snag. The service provider is going to delay the buildout for the near future, according to a group of contractors and others close to Google Fiber that would be working to build out the fiber network.

The Oregonian cited a statement from Google Fiber confirming a delay of "several months." The search engine giant would not provide details on when it would commence building out the network.

No reason was given for the pause, but the cost of rolling out fiber to the city may be a factor.

Portland has been on Google Fiber's radar screen since early 2014, but the process has seen its share of issues in garnering agreements with local officials over rights of way and gaining permits to build fiber huts to carry the service to homes.

"We're continuing to explore the possibility of bringing Google Fiber to Portland and other potential cities," Google Fiber said in a statement. "This means deploying the latest technologies in alignment with our product roadmap, while understanding local requirements and challenges, which takes time."

This new development is certainly surprising since Portland gave approval for Google Fiber to install a 500-square-foot fiber hut in the city in June, and inked a 10-year franchise agreement.

The delay is a blow to local Portland residents who would benefit from faster internet speeds.

What's more, Google's about-face also is detrimental to state lawmakers and local Portland officials, who approved tax breaks and other concessions to attract Google Fiber to the city. In particular, Portland hoped to fund a new "Digital Equity Action Plan" from a fee it would levy on Fiber's revenue. The plan would extend internet access to parts of the city where service is not currently available.

One reason for the delay is that Google Fiber may be considering less expensive options to bring broadband to the city. To build out fiber in Portland, city officials expect Google Fiber would have to pay $300 million, similar to other markets it has targeted.

Some of those options include point-to-point wireless and leasing fiber from other companies and local utilities. For example, Huntsville Utilities is building an open access fiber network in Huntsville, Alabama.

In June, Google Fiber acquired Webpass, giving it access to an established set of fiber and broadband wireless assets that serve a mix of businesses and residential customers. Google Fiber will also able to scale its customer base using Webpass in a number of key urban markets including San Francisco, Oakland, San Diego, Miami, Chicago and Boston, as well as smaller markets like Emeryville and Berkeley, California, and Miami Beach and Coral Gables, Florida.

Although Google has yet to bring its FTTH service to Portland, its influence is being seen as the area's incumbent telcos and cable operators CenturyLink (NYSE: CTL), Frontier and Comcast (NASDAQ: CMCSA) have upgraded their networks to deliver higher broadband speeds.

CenturyLink won a video franchise with Portland in 2014 following the build out of fiber to various affluent Portland neighborhoods. In May 2015, the service provider launched its Prism IPTV service that will run over its 1 Gbps FTTH network in the city.

Likewise, Frontier began lighting up its own 1 Gbps residential customers for select neighborhoods in Beaverton, Oregon in the fall of 2014.

For more:
- The Oregonian has this article

Related articles:
Google Fiber takes another step toward Portland, Oregon service with fiber hut approval
Google Fiber signs agreement for fiber huts in Portland, Ore., moving gigabit plans forward
Google Fiber secures pole deals with Oregon utilities, signaling FTTH buildout intentions

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