Survey finds Google Fiber getting high take rates in Kansas City


If the hare has staying power, the tortoise will lose.

Google’s early results in Kansas City have to be giving incumbent carriers the shakes. According to a survey done by Bernstein Research, one-third of the homes in neighborhoods where Google is already offering Internet and television service have signed up. And even more are thinking about it.

Bernstein surveyed 200 homes in the relatively small area where Google Fiber is up and running. One-third were already taking the service and of the rest, about three-quarters were thinking about it. Most Google Fiber subscribers were paying a monthly fee for service. Bernstein estimated that only ten to fifteen percent opted for the free-ish tier: pay an up front installation fee of $300 and get 5 Mbps at no further cost for seven years.

It’s easy to read too much into these findings. Google picked its first “fiber-hoods” on the basis of pre-commitments from households, so fast uptake is not particularly surprising. Even so, it’s about double what other fiber overbuilders are seeing, including the city-owned system in Provo, Utah that Google just acquired. The take rate there is estimated to be in the 15% to 20% range, a figured matched in the neighboring Utopia fiber-to-the-home system.

Google has a stone simple selling proposition – 5 Mbps free, $70 for a gig, $120 for a gig plus 200 TV channels – that’s reinforced by a well known and trusted brand identity. If its share just pulls even with the competition in high margin market segments, which it appears to doing so far, it could wash away their profits.

That’s the competitive threat that cable and telephone companies are reacting to now.

About Steve Blum

Steve Blum is president of Tellus Venture Associates, a management, planning and business development consultancy for municipal and community broadband initiatives. He is a 30-year industry veteran and an expert in developing new broadband infrastructure and services, including wireless, fiber optic and satellite systems. His career includes playing key roles in the launch and growth of DirecTv in the U.S., as well as other satellite broadcasting platforms around the world. For the past ten years, he has helped build municipal wireless and fiber optic broadband systems. His client list includes many California cities, such as San Leandro, Palo Alto, Oakland, Los Angeles, Lompoc and Folsom. He’s a member of the executive team for the Central Coast Broadband Consortium and has worked with other regional consortia in California. Steve is the author of seven books on the Internet and satellite broadcasting and is a frequent contributor to professional journals and industry events. He holds an A.B. in History from the University of California, Berkeley, an M.A. in East Asia Studies from the University of Washington, and an M.B.A. from the University of St. Thomas. He is a triathlete and multiple Ironman finisher, and is currently ranked in the top 100 of the Challenge Triathlon world rankings, out of more than 30,000 athletes.