Saturday, January 24, 2015

Why is Google Fiber going to “those” cities and not ours?

Why not New York City, Philly, Boston, Pittsburgh, New Haven, Baltimore, or Hartford?  And, for that matter, why not Chicago, Milwaukee, Cleveland, or Detroit?   In these Northeast and Midwest cities, the populations and population densities are much greater than those chosen to go first by Google.  Add in that, in many of these “mature” cities, the median income and percentage of the population with at least a college degree are also higher, we should see Google Fiber trucks in our neighborhoods soon.    But, let’s not hold our collective breathes.  For Google, as it should be, it comes down to a whole host of supply and demand considerations.  There must be a sufficient number of potential buyers with the willingness and ability to pay the monthly service price, a price that has to exceed the costs to construct and manage the network on an on-going basis.  And, what factors can influence those costs?  In addition to raw materials, labor, capital, there are real and man-made barriers to enter and compete, including many things influenced by the municipality (access to rights-of-way, fees, and how many competitors there are in each market).   I have a feeling it will be a very long time before we see Google Fiber up North.  (Note: In many of these GF cities, the incumbents are Time Warner or Comcast and AT&T.   Verizon is not a competitor in any of the markets.) 



Google Cities (actual and planned) Pop (2010) 000 B.S. degree + % Home ownership Rate Median Income $000 Pop/sq. mile Land area (sq. miles)
Kansas City 459.8 31.3 56.3 45.3      1,459.9 314.95
Austin 790.4 45.6 45.0 53.9      2,653.2 297.9
Provo 112.5 39.6 42.3 39.7      2,699.3 41.67
Salt Lake City 186.4 41.2 49.5 45.9      1,678.0 111.11
San Jose 945.9 37.4 58.0 81.8      5,358.7 176.53
Portland 583.8 43.8 53.4 52.7      4,375.2 133.43
Phoenix 1445 26.3 55.5 47.1      2,797.8 516.7
Nashville 601.2 35.3 54.2 46.7      1,265.4 475.13
San Antonio 1327 24.6 55.7 45.7      2,879.8 460.9
Raleigh-Durham 403.9 47.5 53.6 54.4      2,826.3 142.9
Charlotte 731.4 39.8 56.3 52.4      2,457.1 297.68
Atlanta 420 46.8 45.4 46.6      3,154.3 133.15
Average 667.3 38.3 52.1 51.0      2,800.4 258.5
Source: census.gov

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