Google Fiber’s Barratt is leaving, halts further FTTH rollouts

Google Fiber Nashville
Image: Google Fiber

Google Fiber is shaking up the management ranks as CEO Craig Barratt announced in a blog post that he will be leaving while the service provider plans to halt new FTTH roll outs, marking the latest setback in its network expansion effort. 

RELATED: Google Fiber’s recent pullback reflects a ''course correction,” says Wells Fargo

Barratt will continue to serve as an adviser to Alphabet CEO Larry Page, but the company did not name a replacement.

“For most of our 'potential Fiber cities' – those where we’ve been in exploratory discussions – we’re going to pause our operations and offices while we refine our approaches,” Barratt said in a blog post. “We’re ever grateful to these cities for their ongoing partnership and patience, and we’re confident we’ll have an opportunity to resume our partnership discussions once we’ve advanced our technologies and solutions.”

Google Fiber also plans to lay off workers in this division. However, it did not reveal when or how many employees will be let go.

“In this handful of cities that are still in an exploratory stage, and in certain related areas of our supporting operations, we’ll be reducing our employee base,” Barratt said.

The service provider, according to a report in Recode citing various sources, plans to also hold a town hall-like meeting at a later date to lay out new changes.

While these changes are sudden, they should be of no real surprise.

In August, reports emerged that Google Fiber put its planned buildout of 1 Gbps to San Jose, Mountain View, and Palo Alto, California, on hold. Mountain View and Palo Alto city officials said they were told that Google is still committed to their projects. Previously, Sunnyvale and Santa Clara, California, were also in talks with the service provider.

At the same time, Google Fiber has been entertaining alternative last mile access methods, including fixed wireless.

Earlier this year, Google Fiber acquired Webpass, a San Francisco-based ISP that offers fiber and wireless-based broadband services mainly to businesses. Webpass currently offers 500 Mbps symmetrical speeds to MDUs (multi-dwelling units) and office buildings for about $55 a month, and already has about 20,000 customers in five major U.S. cities, including San Francisco.

But even if Google Fiber gets aggressive with broadband wireless, the reality is fiber will still play a large role as a backhaul method to support the wireless sites.

“We believe this concern that Google is backing away from its fiber initiative could cause some worry about LVLT and ZAYO and in a different way, DY,” said Jennifer Fritzsche, senior analyst for Wells Fargo, said in a research note. “While we cannot pretend to know Google's ultimate plan, we still believe it involves a last-mile wireless solution using its Webpass acquisition. To do this, Google would still need a healthy fiber pipe to the base station from which the wireless signal would start. This bodes well for these three companies.”

Fritzsche added that while "Google was a healthy customer to DY, we believe the opportunity remains greater with CMCSA (M. Ryvicker) and T (its largest customer)."

Regardless of the fact that Google Fiber is one of Dycom's smaller customers, the network construction company's stock took a hit this morning. Dycom was trading at $74.06, down $10.65, or 12.57 percent in Wednesday morning trading on the New York Stock Exchange. 

Outside of dealing with network costs of laying fiber, Google Fiber has been weathering challenges from AT&T and Comcast over access to utility poles in cities like Nashville, Tennessee.

Comcast just filed a suit against Nashville over the Google Fiber-supported One Touch Make Ready ordinance. AT&T filed a similar suit in September. The One Touch Make Ready ordinance, which was passed at the city’s Metro Council meeting in September, allows for a streamlined method to attach fiber to existing utility poles.

AT&T and Comcast have been critical of the ordinance, saying that it could cause safety and potential outages.