Friday, January 20, 2012

Don't be Surprised if Google 1 -Gbps Network Gets Low Buy Rates

There is some uncertainty about the construction time table for Google's 1-Gbps fiber access network being built in Kansas City, Kan. and Kansas City, Mo.

That is a relatively trivial issue, though. The bigger issue is whether any significant number of users actually will buy the service.

With a small handful of exceptions, fiber to home uptake globally seems relatively restrained, suggesting that, for most consumers, what they can buy on the older networks provides a value-price relationship that is good enough. 

Under Google's deal with the Kansas City Board of Public Utilities, the municipal power and water provider that owns the utility poles, the company has the option of attaching fiber either in the space reserved for telecommunications for the standard pole-attachment fee or in the electrical supply space for free (although the latter is costlier because it requires more highly skilled technicians). Kansas City Fiber on Track 

Google and officials in Kansas City, Kan., said Google remains on schedule to go live for the first customers for Google's 1-Gbps network in the first half of 2012.

The Kansas City Star has reported that negotiations over pole attachment rates have slowed the build. Those of you familiar with fixed network construction projects will not be surprised by that report.

Disagreement about rates and conditions for pole attachments are an old, and possibly recurring, issue when new providers want to build new communication networks.
The bigger issue will come when Google actually unveils its prices and products. Some will note that other fiber to home services, in the United States and elsewhere, have not universally been met with high consumer demand.

In Germany, for example, FTTH take rates are just 0.4 percent, though one million homes are able to buy the service. Low take rates

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