Google Takes KC Project Live, And At a Reasonable Price

July 26th, 2012 by · 15 Comments

A gigabit connection to the home for $70/month on a one year contract? I’d instantly take it if it were available where I live, but of course this is only in Kansas City where Google has been busy preparing its FTTH project.  At long last, they went live with details today.

There’s a Google-TV option as well, bundled with the 1Gbps connection, for $120/month total. Both options come with 1TB of Google Drive storage, and an installation fee of $300 that they will waive if you sign up for a long enough contract.

Google has finally got around to making its point, which is simply that the US has been paying more per bit than they should and more than other developed countries.  That much has long been true, as Asian and European connectivity has been looking increasingly inexpensive the faster they get.  For whatever reason, we as an industry are not running residential fiber as well as we ought to be.

As for who gets the gigabit connections first, Google has arranged another of its ‘follow the people’ setups. KC residents will pre-register for $10, and when enough in an area (a fiberhood) sign up then Google will start putting in fiber. The biggest fiberhoods get fiber first.

There is a free tier too (for 7 years), which takes explicit aim at the ISPs around the country charging $40+/month for a mere 5Mbps broadband connection. You’d have to pay the installation fee though, which is like paying for more than four years of 1Gbps service anyway – so why bother?

Can any ISP go and do this? Well, the financials are currently opaque, and of course Google surely isn’t paying much for something like IP transit like a smaller company might, nor is it easy for mere mortals to get municipal cooperation at such levels.

But still, as cynical as I have been about Google’s motives etc at times, this looks like a heck of a network build that may make it all worth it.  I sincerely hope the finances work so that it serves as an example for other last mile providers. After all, I don’t think Google is going to be replicating this all over the country anytime soon.

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Categories: FTTH

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15 Comments So Far

  • Oops, in a hay-fever induced typo, I temporarily replaced gigabit with terabit in the wrong places. It’s a gigabit connection with a terabit of space, not a terabit connection with a gigabit of space. D’oh!

  • mhammett says:

    terabyte of space* 😉

    As an ISP looking to deploy gigabit FTTH to the home, this is ridiculously low pricing. I was looking at $350/month and that’s with $0.30/meg bandwidth. All this does is make other people think they can get the same… and they can’t.

  • Brent says:

    The bandwidth wont cost google that much money.
    #1 For whatever transit they pay for (probably not a whole lot) im sure they already have large agreements with all the major networks (a lot of whom are in KC) to pay very very low rates.

    #2 They already have direct peering setup with many many networks. They can probably fairly easily peer off a lot of this traffic without having to pay any transit costs. Most home users traffic is download/downstream, not upload/upstream, sothe bulk of the traffic they will they will be actually taking traffic which is good for their peering ratios.

    Obviously there are lots of other costs involved (construction, Equipment, HR, etc) but im betting they are doing the bandwidth in a very smart way.

  • Carlk says:

    Rob, you deal with a huge volume of numbers on a daily basis, but I think you might be underestimating the power of Google’s free tier offering.

    $300/84 months or 7 years=$3.57 per month for a typical ISP 5MB down 1MB up connection.

    If I am understanding it correctly, it’s a huge incentive to “move” by any community member currently paying $40 per month for this service.

  • mhammett says:

    Maybe Google’s bandwidth pricing isn’t as much because of their peering, but everyone else’s is.

    Just the equipment is most if not more than $300.

  • Anon says:

    The $300 offer is going to absolutely screw Time Warner and Cox. I know a lot of people who subscribe to cable tv because it’s just a few dollars more than internet service- but when you can get internet service for less from Google, all the sudden spending $50 on basic cable feels even stupider than it did before.

    And all of the people getting Gb service can just stream the heck out of online services, anyway. I’m in my mid-20’s, and I have a lot of non-techie friends who are cutting the cord. Good riddance, I say!

  • CoCo says:

    Count me an extreme skeptic that this model is scalable beyond a one market PR campaign. At best, if I were a Tier 1 internet provider, I would be de-peering these @#$% if thats what they started using my backbone for instead of building their own – which costs far more than $70 for a gig.

    Then again, Cogent used to (probably still does) do it, and when companies tried to call them on it and de-peer, their court of public opinion backlash from all the porn users they host was too great to withstand.

  • Most ISP’s won’t do it. But what it does demonstrate is that most ISP’s are lazy, inefficient, non-competitive and lack imagination. It would need to be done in 25 cities to move the needle though. Easy to do on a one off. Hard to do in 25 cities. Although this country needs cheaper broadband and more of it to stay competitive globally. More and more people work at home or at a coffee shop, competing in a flat world for work.

  • Steve says:

    I love the talk around Google and it does seem to be extraordinary and the local competition acts not scared, but they must be freaking out. Lets be honest Google has the cash to make this work- even if not profitable if they want to- and they do things sometimes to shake the market to create eventual profits.
    There are two things that have not been discussed around this story that I believe will make an impact. First and most important- Google had no idea what is getting into for a support model. Google does free stuff and offers really no support for its stuff. Can you imagine the techies there talking calls from your grandmother about the free internet being down? I think their lack of experience in this arena could be an achilles heel. Then again- no support might be better than AT&T.
    Secondly, if I were to bet, why I believe they are going to make the investment and drive owning the network is to switch control of the content providers. I believe across the industry this will be the next phase of battle we see, especially in TV. I think they may have been upset with the Google TV issues they experienced with providers. If are able to get wide adoption, could you see tehm changing the paradigm to- you want to get your content out- pay us? Anyway, I think this will be interesting to watch and see what happens

  • Dominic says:

    Is consumer access to a full gigabit overkill or future-proofing?

    • Brent says:

      If you look where we were at 5-7 years ago speed wise and look at where we are at today, i think its pretty clear its only a matter of time before it will be something people can really use. Hell i have 100mbps download at my house on a cable modem, and if you had told me that would be the case 5-7 years ago when i had 3mbps i would have said you are nuts. Its ahead of its time, but i see that as a good thing.

  • mhammett says:

    There are people on this board that whine and whine about wholesale prices dwindling. Then we have people that say access needs to be cheaper\faster. You can’t have both.

    Google has the same market capitalization as Viacom, Disney, News Corp and Time Warner combined. Their product is data about people, which has always possessed increasing value. The content companies are increasingly having problems monetizing their product. Google won’t take them over, but force their hand to step into the IP age. More content in the IP age means more data for Google. Destruction of the linear channel and customization of content is good for Google.

  • Anon says:

    Who says google is going to roll this out further? Who says it is economically attractive? Seems like a very limited R&D effort to gain customer usage habits etc. I think TW, Comcast etc have more subscribers whose last names start with “x” than all of the folks in this limited trial

  • TE says:

    Google is out to prove what?
    ?That they can lose money if they want – they certainly have ample amounts and this is immaterial to their Balance Sheet.
    ?That they can be disruptive in any industry – track record so far is pretty good.
    Why consumers first and when do they target SMB’s?

    • mhammett says:

      Consumers don’t care about the loss that Google runs it at. They’ll just see it in KC and complain to their Congress critters that they want it and some bill will be passed to provide it.

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