Friday, July 27, 2012

Google unveils Gigabit network in Kansas City -- will they disrupt the ISP and mobile access industries? (and other questions)

Google has announced three pricing plans for gigabit networking in Kansas City:

Gigabit +, $120/month: You get 1 Gbps Internet access plus TV. You also get a 2TB cloud DVR with 8 virtual tuners and a Nexus 7 tablet that you can use as your remote control.

Gigabit Internet, $70 per month: You get 1 Gbps Internet access plus "advanced" WiFi and 1TB of cloud storage on Google Drive.

Free Internet, $0 per month: You get 5 Mbps, but there is a one time, $300 construction charge that can be paid in $25 installments.

Note that they are not even bothering with a telephone/TV/Internet "triple play" -- they assume you will do IP telephony and/or have a cell phone.
Google's rollout scheduling is innovative. Instead of doing purely speculative installation in various parts of the city, they are asking people to pay $10 to pre-register. Those pre-registrations will determine the scheduling of installation in various "fiberhoods." The fiberhoods with the highest pre-registration percentage during the next six weeks will get Google fiber first.

They urge people to encourage their neighbors to pre-register and they have sweetened the pot by promising to give community buildings like schools, libraries and hospitals in the fiberhood free Gigabit Internet.

Well, there are a lot of unanswered questions. Is the Internet service symmetric? How many fiberhoods will Kansas City be divided into? Local channels are included in the television coverage, but which other channels will be included? Will there be bandwidth caps? Will the subscriptions be month-to-month? How good a job will they do integrating the Nexus 7 controller with the TV set? What will be the uptake and response to the fiberhood rollout plan? What new applications will be developed to utilize the bandwidth? Will Google "seed" the Gigabit application market?

I wonder what Google's deal with Kansas City looks like. The City is gaining valuable infrastructure and Google is getting a pilot-test network. Is Google paying anything for access to City tunnels and conduit? Is the City paying anything to Google? (Remember that many cities wanted in on the program). Is there any sort of exclusivity? Time limits?

This also reminds me of Google's 2007 WiFi rollout in Mountain Veiw, California. I've not heard much about that recently, and looking at the project Web site, it does not seem like a lot has been happening.

The most important question is -- what will be the response of the cable and telephone companies in Kansas City? Google's high speed service is a direct competitor to cable companies (and FIOS where available) and the slow, free service competes with DSL. And, just maybe Google has provisioned enough fiber to eventually provide backhaul from cell towers. Is this the beginning of the end of the "gentleman's agreement" to divide up landline and mobile Internet access among the cable and telephone companies?

Regardless, my hat is off to Google for trying and I hope they succeed!

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Google has answered the questions about their contract terms. After a year, you have paid your $300 construction fee in full. For TV customers, your first set top box (and Nexus 7) are free. You can rent ($5 per month) or buy ($120) more if you have multiple TVs.

They also adjusted some of the fiberhood thresholds to make it easier for poor neighborhoods to qualify.

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Timothy B. Lee provided answers to my questions about Google's deal with the city in a post entitled How Kansas City taxpayers support Google Fiber. Lee points out that the city offered Google many incentives and includes a link to the text of their agreement for those wishing to delve into the details. It turns out that Google is receiving power, office and equipment space and more.