Google is offering Kansas City residents a set-top box for their TVs (above) that allows the search giant to compete directly with cable companies over its own 1 Gbps fiber network. Photo: Google
After months of mystery, Kansas City residents learned today that the first high-speed citywide network built by Google will bring them not just super-fast Internet but full-featured cable-style TV service. Google said in a live announcement Thursday morning that the neighborhoods that rally the most interest will be the first to get hooked up to Google’s fiber-optic lines, which the company says will offer 1 gigabit-per-second downloads and uploads—far faster (Google says 100 times) than the typical broadband connections now in most U.S. homes.
The high speed means Google can compete directly with cable and satellite TV companies. For $120 per month for both TV and internet, residents will get a set-top box that Google says will deliver hundreds of HD channels and tens of thousands of on-demand movies and shows. The service even comes with Google’s Nexus 7 tablet, which will serve as the set-top box’s remote.
Kansas City, Kansas, and Kansas City, Missouri, together won out over 1,100 other cities to become the testbed for Google’s first big venture into building and owning the physical network consumers use to access the internet. The project, known as Google Fiber, looks like it will give Kansas Citians more leverage in negotiating their monthly cable bills. But beyond the city limits, cable companies and telecoms likely don’t have to worry just yet that the search giant will start spreading its broadband tentacles across the country.
Buzz around Google as a cable competitor rose earlier this month when an unidentified snoop shot a photo purportedly from inside Time Warner Cable’s Kansas City office of a placard promising $50 gift cards to employees for tips on Google’s progress and plans.
While Time Warner’s Kansas City operation may have reason to fear a major new competitor to its own fat cables, longtime industry analyst Bruce Leichtman says cable and broadband companies have little to fear from Google nationally.
By laying its own fiber, Google in Kansas City has become what’s known as an “overbuilder,” because they’ve installed their own wires over existing cable and telecom infrastructure. Leichtman says overbuilding is a notoriously tricky business that Google has no good financial reason to enter on a wide scale.
According to Leichtman’s own research, 75 percent of U.S. homes have a broadband connection, and 87 percent have a “multi-channel video service,” a category that includes both cable and satellite. And, according to a recent FCC report, the companies supplying those connections are delivering the speeds they promised. In other words, U.S. residents aren’t having much trouble getting connected using the infrastructure that’s already available. They may not like their cable company, but they aren’t clamoring for someone to bring yet another wire into their homes. Any attempt by Google to build out a broader fiber infrastructure would be money spent to meet what Leichtman says is demand that doesn’t exist, even if the company comes through in Kansas City with promised 1 gigabit-per-second connections citywide.
‘The faster the Internet, the better for Google. But they don’t need to be the ones who own the faster Internet.’
“The chance of them making any serious advancement into the industry are minimal at best,” he says. “The faster the Internet, the better for Google. But they don’t need to be the ones who own the faster Internet.”
So what does Google gain from the project, nearly three years in the making? Kansas City tech leaders and the company itself have described Google Fiber as an experiment in civic innovation: Give a whole city super-high speed connections and see what they do with the bandwidth.
But Google may also have more self-interested motivations. The company offers search, advertising and content on one end and hardware to consume those services on the other. But cable companies, telecoms and wireless carriers own the bridges Google must cross to join those two ends together. As those gatekeepers fight net neutrality standards and work to meter data, the tolls Google and its users must pay could go up. While a network in just one city doesn’t give Google the bandwidth to push back, the company has learned for itself what laying its own fiber will take in case it ever wants to seek end-to-end control in bigger markets.
In the much shorter term, getting into the TV business is also never a bad idea for an ad company. Its earlier hardware-directed effort, Google TV, didn’t take off. Google Fiber offers the company a chance to experiment with new ways to take advantage of both TV and the internet over the kind of high-speed connections entrenched companies will be bringing into an increasing number of homes in the coming years.
Karl Bode, a reporter for DSLreports.com, has probably covered Google’s progress in Kansas City more closely than anyone else. He writes: “Like the 1 Gbps fiber offering, Google’s interest is in smaller-scale deployments aimed at testing next generation ad technologies—while collecting the kind of real-world end user congestion and performance data ISPs work very hard to keep private.”
Thursday’s announcement marks the start of what Google calls the pre-registration period for Google Fiber, which ends September 9. While neighborhoods vie to become the first to get the hook-up, some wonder how far the company will go to bring broadband to those who historically haven’t been able to afford it.
Michael Liimatta runs a Kansas City nonprofit that works to bring Internet access to low-income residents. The group, Connecting for Good, hoped to take advantage of Google Fiber to create a “Wi-Fi cooperative”—an inexpensive neighborhood-wide network of Wi-Fi antennas connected to a Google Fiber backbone. The cooperative would have given residents in the Kansas City, Kansas, neighborhood of Rosedale wireless access to the Internet for a nominal fee. Such access is especially important for school kids owing to the city schools’free laptop program. Kids can bring their computers home, Liimatta says, but end up parking outside their schools in the evening to get their homework done because they can’t get online at home.
Liimatta says Google turned down the co-op idea about a month ago, saying it amounted to a resale service that didn’t meet the company’s planned licensing requirements. At the time, Google spokeswoman Jenna Wandres told the Kansas City Star that “digital inclusion” was a priority for Google but that it was premature for organizations to make any plans related to building services on top of Google Fiber.
Since being turned down by Google, Connecting for Good has come up with a scaled-down plan that would offer Wi-Fi to a 170-unit Rosedale housing project for free, assuming sought-after grants to put up the antennas came through. Liimatta says the hardware would cost about $25,000, or about $150 per unit.
Google’s announcement Thursday presents another option, one slightly more costly than the housing project plan but perhaps less of a logistical challenge. The lowest tier of the Google Fiber service offers standard 5-megabit-per-second broadband internet access for a $300 startup fee. Other than that initial cost, Google guarantees customers will get broadband for free for the next seven years.
“We haven’t given up on something (Google) will get on board with. We’re not trying to compete,” Liimatta says. “We’re just trying to say, there are poor people who can’t do this.”
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