Some of the more broadband-disadvantaged neighborhoods in Kansas City have a very real chance of never becoming Google (Nasdaq: GOOG) "fiberhoods" for the same economic reasons that they're now on the wrong side of the digital divide.
With two weeks remaining for neighborhoods to sign up potential customers for the service, many neighborhoods—"chiefly the least prosperous pockets of the metro area," according to the Columbia Missourian—are behind the pace needed to hit the threshold of anticipated customer penetration to qualify for Google Fiber service, the newspaper reported Friday, noting, "that means many of the free connections Google agreed to make to public buildings, library branches and community centers won't happen."
Google told the newspaper it's not writing off any fiberhoods and is working to fix problems for apartment dwellers who might sign up for the service. Still, the very nature of the sign-up process—driven by logical and reasonable economic factors—could make it tough for Google to build into the areas and expect a fair rate of return on the investment.
Matters are further complicated for Google by local organizations which are helping consumers with the $10 pre-qualification fee. While helping boost pre-reg numbers, this effort also leaves Google wondering whether these customers will in the end pay $120 a month for Internet and TV service or $70 a month Internet or even $25 a month for 5 Mbps connections.
"We're thrilled that some local organizations want to encourage widespread Internet access by helping with the Google Fiber pre-registration process. That being said, people should only pre-register if they intend to get Google Fiber," company spokeswoman Jenna Wandres told the newspaper.
Google's dilemma—and the plight of the citizens trapped in neighborhoods without broadband service—is part and parcel with the entire "digital divide" argument. Incumbent providers like Time Warner Cable (NYSE: TWC) and AT&T (NYSE: T) were franchised into their businesses with different service requirements. TWC still gives free Internet and TV service to more than 350 libraries, schools and other buildings in Kansas City in Missouri and Kansas, the newspaper said. AT&T U-verse, to a lesser extent, still reaches 400,000 homes in the market.
The problem for Google Fiber comes down to perception and the way the service was introduced. Google positioned itself as a new way for the masses to get ultra-broadband, but even a company with pockets that drag on the ground must financially justify the investment, so Google set a pre-registration requirement as a condition for fibering a neighborhood.
Nevertheless, some residents assumed that Google would offer its service free to schools and libraries throughout the two cities. The company's agreement with the governing bodies of both Kansas Cities required only 430 locations and the cities picked those spots, leaving other neighborhoods trying to win a pre-registration lottery that realistically favors the more affluent.
"I'm concerned that the digital divide will be exacerbated by the fact that you'll have extremely faster Internet in some neighborhoods while people in neighborhoods with fewer resources will be left even further behind," Christopher Barnickle, an assistant director at the Kansas City, Kan. Public Library told the newspaper.
His thoughts were echoed by school district spokesman David Smith who opined, "It is unimaginable to us to have that divide reopen."
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