Newswatch
As part of its Google Fiber initiative, Google held a contest in which municipalities across the U.S. applied to become the test bed town for Google Fiber internet service. The twin Kansas Cities--Kansas City, Kansas and Kansas City, Missouri--were selected winners. Residents of these cities will have access to three Google services: Gigabit Internet, Fiber TV, and Free Internet. All the services require that a resident live within a predetermined "fiberhood," and will eventually require a $300 construction fee to support the fiber build (this fee is waived for early customers).
Gigabit Internet is Google as ISP, delivering unlimited, un-throttled 1Gbps download and upload speeds for $70 a month. Upgrade to Fiber TV, and for $120 a month Google is also the cable guy, supplying subscribers with a full TV-channel lineup, a DVR box that captures 8 HD shows simultaneously, and a free Nexus 7 tablet that functions as a remote. Both of these offerings include 1Tb of Google Drive cloud storage as well. For customers who spend less on connectivity and entertainment, Google offers a third option: Free Internet. Provided a customer lives within a "fiberhood" and pays the $300 construction fee (which can be paid in $25 installments), Google will deliver unlimited 5Mbps connectivity for free.
It's clear that fiber is the underlying enabler for Google's entry into the CSP realm; it delivers such a large information highway that Google can offer free internet (at the measly rate of 5 Mbps--the same speeds many ISPs sell) to local non-subscribers. For paying subscribers, the customer experience on a 1 gig fiber connection will likely be a compelling reason for subscribers to stick with Google, and the connection fee strategy is innovative; customers are essentially subsidizing Google's fiber buildout. Further, Google Fiber TV has been developed in concert with the latest market research, it seems. Analysts have indicated that the tablet is the new remote, so Google provides a free Nexus 7 tablet; multi-screen is table stakes for MSOs, so Google innovates with seamless multi-screen content delivery; and the typical experience of browsing on traditional cable offerings is antiquated, so Google Fiber TV will sport multiple dynamic interfaces and user profiles that resemble Netflix, not the "cable grid."
While this news is exciting, it's important to note the size of the launch; in a word: microscopic. Only about 1,500 households will have access to the new service offerings. The big question is, are other cities already in the works, or is this simply a test? Only the future will tell, but in the meantime, Time Warner Cable and AT&T (the Kansas City incumbents) should be on alert, as they are certainly on Google's radar as competitive targets.
