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Google begins process to expand Fiber in 2015

Thu, 02/20/2014 - 1:03pm
Brian Santo

Google is preparing to expand Google Fiber to more cities, with the list of potential candidates including 34 cities in eight states.

The 34 cities on Google’s list include San Antonio; Atlanta; San Jose, Calif.; Phoenix; Portland, Ore., and Salt Lake City, along with some of the more affluent suburbs of many of those cities.

As with the previous three Google Fiber cities (Kansas City; Provo, Utah; Austin), Google is playing for the most favorable possible build conditions, including guarantees the company will be able to string fiber with a minimum of fuss, plus any regulatory grease that might be forthcoming.

Google calls that “working with your city leaders to see if Fiber is a good fit.”

Google said it will provide candidate cities with a checklist of requirements. “We’re asking cities to provide us with information that can speed up planning and construction (e.g. maps of poles, conduit, existing water, gas, and electricity lines). We also ask that they streamline processes (e.g. permitting procedures and access to local infrastructure) to make it easier for a construction process of this scale to move quickly,” wrote Milo Medin, VP, Google Access Services, in the blog post announcing the expansion of the project.

The company’s pace with Fiber will continue to be deliberate. Completed checklists won’t be due until May 1, and the company said it doesn’t expect to decide which cities are next to get Google Fiber until the end of the year. In other words, Google is unlikely to expand its service beyond its initial three markets for at least another full year.

Candidate cities will have to actively court Google, but even then, the company might decide not to build if doing so might be hard.

“For example,” the company said, “underground construction might be really difficult due to bedrock or unusually hard soil. In these situations, we would share what we learned in our studies with city leaders and we hope they’d be able to use that information to explore other options for bringing super high speed broadband to their residents.”

And Google will continue to ask consumers in candidate markets to volunteer for service first.

That process allows the company to neatly sidestep any appearance of redlining – not that that was a problem for Verizon with its FiOS build, or AT&T with U-verse.

Moffett/Nathanson did some quick calculations about which competitors might be most exposed to the potential Google Fiber builds.

“The market with the largest number of potentially affected households is Phoenix, where privately-held Cox is the dominant cable operator,” Moffett/Nathanson said. “A full build would overlap with about 5.0 percent of Cox’s subscribers, by our estimates.”

Five of the target markets are served by Comcast, with another three by Time Warner Cable. (With the proposed merger of those two, that may or may not be much of a distinction by the time Google starts expanding.) Moffett/Nathanson expects potential overlap in those cities to range between 3 and 4 percent.

AT&T U-Verse also operates in five of the proposed markets. It might have an exposure of about 2.2 percent of its subscribers.

“Not surprisingly, Google has not targeted any Verizon FiOS markets, so Verizon’s operations will be unaffected,” the analysts noted.

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