Last $149.87 USD
Change Today -10.45 / -6.52%
Volume 3.9M
As of 8:10 PM 07/29/14 All times are local (Market data is delayed by at least 15 minutes).
text size: T | T
McClatchy-Tribune  05/06/2014 1:35 PM ET
Survey: Google Fiber selling well in Kansas City [The Kansas City Star :: ]

May 06--In some parts of Kansas City, Google Fiber sells Internet hook-ups to up to four in five homes that its network passes, according to a Wall Street research firm.

Bernstein Research conducted door-to-door surveys in five neighborhoods, giving the most comprehensive look so far at how many people pay Google to provide cable-like TV or Internet service. Google Fiber will not say how many customers it's corralled in the market.

Broadly speaking, Bernstein's report says, wealthier neighborhoods subscribe to Google Fiber at far higher rates than poorer areas.

In Google's Wornall Homestead "fiberhood" -- the company's term for neighborhoods -- between Brookside Boulevard and Wornall Road and roughly 57th to 63rd streets, Bernstein said 83 percent of homes are paying to tap into the firm's fiber optic network.

In the Community College fiberhood in Kansas City, Kan. -- roughly bordered by State Avenue, Parallel Parkway, North 78th Street and College Parkway -- about 27 percent of respondents subscribed to Google Fiber.

"Google Fiber has gained a significant foothold in its early Kansas City fiberhoods," said the Bernstein report.

The research firm estimated Google will capture the business of half or more of the homes it passes in three to four years.

So far, Google is nearing completion of construction throughout Kansas City, Kan., and the central part of Kansas City. It's also recently completed signing up customers in the southern stretches of Kansas City, Grandview and Raytown. It's currently recruiting customers in the Northland. It says it will install its service in all those areas by the end of the year.

With that construction have come more complaints about disruption to roads and lawns to make way for fiber optic lines.

Google sets its own thresholds for the needed number of customers to justify construction. If too few customers sign up in a neighborhood, it sells to no homes in the area.

Competitors have derided that approach as cherry-picking, partly because previous franchise holders were required to offer their services across an entire city. Google, conversely, has built its business plan around expanding only where profitable pockets of customers are willing to subscribe.

Bernstein's survey of 350 households also found general satisfaction with Google Fiber, with most customers saying they'd recommend the service to other people. Google Fiber customers overwhelmingly said they would not switch back to other Internet providers, even if those companies matched the newcomer's broadband speed and price.

Yet Bernstein acknowledged its survey could be slightly skewed. It polled people in the neighborhoods that have had service the longest. The first home connections were wired in late 2012. Google started its installations in neighborhoods where the most residents expressed interest. That suggests those earliest customers may have been excited about Kansas City's first-in-the-country roll-out of the service.

The research firm said it's not surprised that Google won't reveal its customer numbers because the California Internet giant generally reveals little data about its business. It noted that Google's competitors in Kansas City, chiefly Time Warner Cable and AT&T, also won't say how much business they're losing to the new kid on the block.

"We think the incumbent cable and telephone have not said anything actually useful (because) they are losing large share in the very early Google Fiber neighborhoods," Bernstein said. "This is at least what our survey of Kansas City fiberhoods suggests."

Kansas City is the proving ground for Google Fiber, a service novel in how it runs high-capacity fiber optic lines directly to homes. While commercial services deliver such uber-bandwidth to businesses and large institutions, Google Fiber is distinct for the broadband speeds it sells at a household price.

The survey also gave a peek at what level of service customers are most likely to buy.

Its most popular package, according to the Bernstein numbers, is stand-alone ultra-fast Internet. Google sells that for $70 a month on yearly contracts and promises both upload and download speeds of 1 gigabit per second, nearly 100 times faster than the norm for home Internet connections.

Google also bundles that with a conventional TV service -- one lacking the popular cable channel AMC but that can deliver eight programs simultaneously and with large DVR and online data storage. That starts at $120 a month and requires a two-year contract.

Equally popular, says Bernstein, is Google Fiber's "free" service. For a $300 installation fee, payable in monthly payments of $25 for the first year, customers get up to seven years of service. But the speeds are far slower -- downloads of 5 megabits per second and uploads at 1 megabit per second.

To reach Scott Canon, call 816-234-4754 or send email to scanon@kcstar.com.

 

Stock Quotes

Market data is delayed at least 15 minutes.

Company Lookup
Recently Viewed
Z:US $149.87 USD -10.45

Industry News

Sponsored Financial Commentaries

Sponsored Links

Report Data Issue

To contact ZILLOW INC-CLASS A, please visit . Company data is provided by Capital IQ. Please use this form to report any data issues.

Please enter your information in the following field(s):
Update Needed*

All data changes require verification from public sources. Please include the correct value or values and a source where we can verify.

Your requested update has been submitted

Our data partners will research the update request and update the information on this page if necessary. Research and follow-up could take several weeks. If you have questions, you can contact them at bwwebmaster@businessweek.com.