Google Fiber's 'fiberhood' plan could further the broadband divide, say critics

Google Fiber (NASDAQ: GOOG) may have grand ambitions for its fiber-to-the-home (FTTH) initiative, but a growing number of critics are concerned that its "fiberhood" selective build-to-demand approach may leave a number of consumers in the broadband lurch.

Michael Liimatta of Connecting for Good, a Kansas City nonprofit that focuses on digital divide issues, said that by only installing FTTH in areas where a majority of residents are interested "leaves out every city's most vulnerable citizens."

Kansas City, Kan., and Kansas City, Mo., city officials said they did not ask Google Fiber to wire each of their entire cities because they figured that the 1 Gbps service would help them stimulate the local economy and make them a more attractive destination for businesses and residents in certain areas.

Under its plan, Google Fiber sliced up the region into a few hundred homes it called "fiberhoods." It asked residents to pay $10 to preregister for the 1 Gbps fiber-based service.  

"The main point was to win and bring that infrastructure to our city," said Rick Usher, assistant city manager of Kansas City, Mo.

Former Kansas City, Kan., Mayor Joe Reardon said in a Wall Street Journal article that in order to gain entry into the Kansas City market, officials required Google Fiber to offer free service to schools, libraries and community centers. The service provider offers service in "economically distressed" neighborhoods and offers a lower speed service for free for seven years for those customers willing to pay a one-time $300 installation fee.

However, Liimatta and others like Angela Siefer, who researched these issues this year for the University of Illinois's Center for Digital Inclusion, question if Google's plan is sufficient.

"It is too early to say whether the stuff Google is doing is enough," Siefer said. "Being friends with Google is great, but you have to go further to address these issues."

Google Fiber is hardly alone. AT&T (NYSE: T) said in April it would offer Internet speeds of up to one gigabit in as many as 100 cities. It is building to demand and working with local authorities to reduce construction costs, the company said. It recently said it would bring the high-speed service to Cupertino, Calif., close to Google's headquarters.

John Stankey, group president and chief strategy officer for AT&T said during the recent Oppenheimer 17th Annual Technology, Internet & Communications Conference that by building to demand and working with local government entities on easing permitting for rights of way to deploy fiber, it can reduce construction costs.

This approach "starts to make this business model look quite attractive," Stankey said.

Not all cities are embracing the build-to-demand approach.

In 2013, Los Angeles put out a request for information (RFI) asking private companies to build a gigabit-based fiber network that could reach all of the city's homes, businesses and schools. The city got 16 responses, including AT&T, Time Warner Cable (NYSE: TWC), IBM and Alcatel-Lucent (NYSE: ALU).  

For more:
- WSJ has this article (sub. req.)

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