Google Fiber (NASDAQ: GOOG) finally provided a further glimpse of hope that businesses will be able to get their 1 Gbps fiber-to-the-premises (FTTP) service at least in the Kansas City area, but broader expansion is hardly a given.
Getting access to a symmetrical fiber-based service for small and medium businesses (SMBs), a market segment that's largely ignored by larger incumbent players like AT&T (NYSE: T), could be compelling, particularly for bandwidth-hungry upstarts. Since the service provider began installing service in 2012, a growing base of startup companies have located their businesses in Kansas City-area residential homes that have fiber connectivity.
Being a business service, Google Fiber's business-grade 1 Gbps service will be available for $100 a month, which is slightly higher than the residential $70 price tag. According to a Kansas City Star article, eligible businesses will be able to purchase one to five static IP addresses for an additional $20 to $30 a month. Having access to these addresses will enable businesses to run dedicated servers to host their company websites or give their workers remote network access.
One of the caveats of this launch is that it's only going to be available in select neighborhoods in Kansas City, Kan., and Kansas City, Mo.
This is not Google Fiber's first foray into the business service market. Earlier this year, the service provider launched a business service trial where it connected its fiber network to a limited but unspecified amount of Kansas City-area SMBs.
A symmetrical fiber-based 1 Gbps connectivity could also put pressure on local telcos like Consolidated Communications and cable operator Time Warner Cable (NYSE: TWC).
Consolidated Communications, which entered the Kansas City market through its acquisition of SureWest, also offers FTTP-based services to consumers and traditional Metro Ethernet services to businesses. Meanwhile, local cable provider Time Warner Cable provides a 75/5 Mbps speed tier to business customers for $200 a month.
Bob Udell, CEO of Consolidated Communications, said during the Wells Fargo Securities Technology, Media & Telecom conference on Wednesday that while they could offer a similar 1 Gbps offering, they have no plans to offer another me-too service.
"I think the competitive reaction to that has been a little irrational at times by trying to do a me-too service," Udell said. "Unfortunately, at some point we become no different because we want to make customers confident our network can do what might be necessary way down the road in the future."
What will be interesting to see is if Google Fiber replicates the 1 Gbps business service in other markets it cited as potential stops like Austin and Provo, Utah. At this point, Google Fiber isn't saying much other than it recognizes those cities as areas that have a growing population of small businesses.
"We know that small businesses play a big part in Provo and Austin, too," said Carlos Casas, Kansas City Field Team Manager, in a blog post. "And while we don't have specific plans for small businesses in other cities right now, we'll be sure to share updates when we can."
Despite the allure of a 1 Gbps fiber service for small businesses, there are a number of ongoing sticking points that could prevent future business service expansion. As it has talked to other potential cities, the company has asked for more favorable access to rights-of-way on existing utility poles, access to conduit and a streamlined permitting process.
Case in point is in Leawood, Kan. Google Fiber recently abandoned an effort to bring service to that city due to what it said was an unfavorable construction environment.
Google Fiber is hardly alone in extending 1 Gbps service to business users. Outside of Kansas City, incumbent telcos like Frontier have played up the fact that their 1 Gbps service targets both residential and business users. Following the lead of AT&T and CenturyLink (NYSE: CTL), the service provider began offering 1 Gbps service to both residential and business customers in both Durham, N.C., and Beaverton, Ore.
What this all means is that Google Fiber has likely come to the realization that in order to be a serious fiber service player, it needs to have a solid business offering. But even if it doesn't expand into new areas, it's clear that it is continuing to raise the bar on how speed can help a small business meet their goals.--Sean