Google Will Expand Fiber, But There's a Catch

Google plans to grow its Fiber Internet and pay television service, but only in cities which make it easy.

"If you make it easy, we will come. If you make it hard, enjoy your Time Warner Cable ," Google Fiber Vice President Of Access Services Milo Medin told a Washington D.C. audience last week, GigaOM reported.

The search giant has been slowly growing its high-speed service from its initial cities of Provo, Utah, Austin, Texas, and Kansas City, Missouri. It has four more cities already approved for expansion and a number of others under consideration.

Source: Google

What is Google Fiber?Google Fiber is a super-fast Internet connection and pay television offering. Coming in at 1000 MBPs for its top offering, the service makes the speeds offered by traditional Internet service providers look like a turtle running in slow motion.

"Google Fiber starts with a connection that's up to 100 times faster than today's basic broadband speeds," according to the service's website.

The service also offers 150 or so cable channels as well as one terabyte of cloud storage for residential customers. Fiber offers "basic" Internet service -- up to 5 Mbps download and 1 Mbps upload speed -- for free (though there is a one-time $300 construction fee, which can be paid in installments). Gigabit Internet service, with up to 1 gigabit (1,000 Mbps) upload and download speed costs $70 a month while adding 150 plus cable channels brings the price to $120 monthly.

The Google Fiber van in Austin, one of the initial cities with the service. Source: Google

Rolling it out isn't easyLaunching it in a new market requires a large infrastructure investment by the company which explains why it only wants to work with cities that cooperate. The company explained how it works on its website.

It's not easy and it's not quick, so Google has an opportunity to be very choosy about its partner cities. Since Time Warner Cable, Comcast , Cablevision , and the rest of the major ISPs don't want to compete with Fiber, Google can avoid cities where the relationship between the existing providers and government is a little too cozy.

A brilliant strategy

Medin has thrown down a gauntlet which essentially says, "hey, we'd like to come to your city, but your politicians like bureaucracy more than they do really fast Internet service." It's a brilliant ploy that takes blame away from Google and pressures cities to remove hurdles in order for Google to choose them.

In his speech Medin cited "byzantine permission processes (including a fetish for faxes) and an inability toprovide accurate information about infrastructure" as the main reasons that hurtsome cities' chances to get Fiber, According to GigaOM.

Basically, Google is not in a rush to roll out Fiber so it can afford to only work with municipalities who actively work to remove hurdles. This isn't Uber or Lyft pushing to expand using a better to ask forgiveness than permission strategy. It's a company which has something cities really want which can essentially ask for whatever it wants.

Instead of fighting the power, Google has made cities grovel before it.Since the product offers better pricing and faster speeds than traditional ISPs and cable companies, the public will want it. Citizens will clamor for Fiber and pressure elected officials to do whatever Google wants.

That might not lead to fast expansion, but this might be a case where slow and steady leads to rising pressure on leaders in cities where politics are all that keeps Google from bringing free, fast Internet service.

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Daniel Kline has no position in any stocks mentioned. He has never been to Austin, but is head there in a few weeks for SXSW. The Motley Fool recommends Google (A shares) and Google (C shares). The Motley Fool owns shares of Google (A shares) and Google (C shares). Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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