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Summary:

Google has convinced 10 percent of the people living in areas where it can deploy fiber to pre-register for the service with two days left before the Sept. 9 deadline. That’s a good start, but it might not be enough to get the service to profitability.

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Updated: Google’s plan to get people to sign up in advance for its gigabit fiber-to-the-home project has managed to score the search giant a whopping 21,000 people who paid $10 to pre-register for the fiber service. That’s roughly 10 percent of the 161,600 homes in Google’s 202 so-called fiberhoods (Google says there’s an average of 800 people per fiberhood) — and a fairly significant level of commitment to the product.

But will it be enough to be profitable? Dave Burstein, a telecoms reporter and analyst, estimates that it would need a take rate of between 20 and 30 percent to be profitable.

There are still two days left for residents to sign up for the service — the deadline is midnight on Sunday, and Google will then determine which areas get fiber first, based in part on the number and density of signups. I made my count around noon PT, so that number is subject to change. Once Google announces the lucky fiberhoods, it will send out trucks to connect those homes to the Google network. At the July launch of Google Fiber, Milo Medin — the VP of access technologies for Google — estimated that once the neighborhoods are chosen, and Google sends out its technicians to the neighborhoods, residents there might have the service in about a week.

That’s exciting for the residents of Dubs Dread and Greenway Fields, where currently 41 percent and 50 percent of the homes in the fiberhood have signed up for Google’s $70-a-month Internet or $120-a-month TV and Internet service. Google also has a free 5 Mbps service if residents pay the $300 connection fee, either up front or spread out over two one year at $25 a month.

Milo Medin at the Google Fiber announcement.

However, there are plenty of residents in Kansas City who are concerned about how few lower-income neighborhoods are making the cut. The Kansas City Star has published several letters from people noting that the Google offering isn’t helping bridge the digital divide, with some writers pointing out that in some areas people predominantly rent their homes, and their landlords aren’t choosing to connect, and others firing off against Google’s tactics.

Of most concern to many of these residents is that Google will also connect community institutions such as fire stations, libraries, parks and schools with its service if enough people sign up. For residents of neighborhoods who can’t meet the threshold to get a gig in their fiberhood, the loss of not only their chance to get a gig connection at home but also the chance to connect their schools, rankles.

It’s been enough of a problem that Google last Friday said it would adjust some of the thresholds in certain neighborhoods based on a reworking of the number of residents and other information. The Kansas City star also reports that Google is sending people out to knock on doors to try to get residents in those neighborhoods to sign up.

The other aspect that’s likely worrying residents is that if they don’t pre-register before Sunday, it’s unclear when they might get the Google Fiber service if they decide they want it later. A Google spokeswoman said that Google would offer residents in fiberhoods that have already qualified another opportunity to get service at a later point in time, but that she didn’t have details yet on how that process would work.

And while this fits in with the way Google is trying to lower the cost of deploying broadband, it is not the most familiar or customer-friendly way to offer a service. Before the Internet, it’s hard to imagine very many situations where you would have to get enough of your friends to participate before you get to buy tickets to a movie or to get your teeth cleaned. And try telling people that unless they pre-order a book on Amazon the publisher won’t sell that book to them — until it became convenient again for the publishing company — and most people would balk.

Yet these models do work in certain industries, such as buying a home in a planned development or even trying to snag a deal at a pop up retail store. Google is just bringing it to communications which means residents are having to adjust to a new reality.

  1. The ‘spread out’ cost adds up to $600, vs $300 upfront. That can’t be right.

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  2. Can’t wait for it to come to Dallas!

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  3. Google Fiber Forum Friday, September 7, 2012

    Joe, it isn’t It is $300 upfront or $25/mo for 1 year.

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    1. They could offer an optional price to hookup the schools, libraries, etc outside the qualifying ‘hoods which should in turn make it easier to extend into those ‘hoods later by interconnecting to those interim points.

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  4. Gigabit to the consumer is a nice and lofty idea, definitely worthy of Google’s effort and money. Unfortunately, like many things Google, it’s also premature and ill-executed.

    Google will end up with all the arrows on their back, then someone else will come in and clean house. The pioneers almost always get killed.

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