Small Business

Google Fiber: Super fast Internet coming to more cities

Google Fiber attracts startups
Google Fiber attracts startups

If you build it, the innovators will come. In 2011, Google announced it was launching its blazing fast Internet service to the Kansas City metropolitan area to boost the Midwest start-up scene.

Now four years later as Google plans to expand the Internet service called Google Fiber to other U.S. regions, some small business owners report mixed results. But while the ramp-up process can take time for some, Google's expanded rollout for high-speed Internet shows the growing demand for faster connectivity. The U.S. broadly is playing catch up with other countries that already have super high-speed Internet services.

Google Fiber is a high-speed fiber-optic network. Internet speeds on fiber optic cables are up to 100 times greater than the national average.

Google is working to expand in 19 more cities in five metro areas including Salt Lake City, Atlanta, Nashville, Charlotte and Raleigh-Durham. The Internet often features posts about consumers wondering if and when Google Fiber will come and turn their backyard into "fiberhoods."

So what's at stake? Early anecdotes show some businesses are willing to relocate for faster Internet speed, and that costs savings associated with the new connectivity infrastructure can be substantial. Bottom line: more business at a quicker pace.

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Cost savings related to faster Internet can be a particular game-changer for small businesses, said Marcelo Vergara, chief executive of Propaganda3, a website and app development company. Vergara said fast connectivity has allowed him to cut tech-related infrastructure costs significantly.

"I can trust my network, thanks to Google's bandwidth," Vergara said. "I have reliability, and I have moved all of my internal services off to the cloud."

What it's done

Adam Arredono and Matthew Marcus are co- leaders of the Kansas City start-up village.
Kate Rogers | CNBC

In Kansas City, Missouri, for example, 121 businesses have launched or relocated to the Google Fiber area, according to the city manager's office. A combination including start-up accelerator groups and entrepreneur programs has also helped the start-ups adjust to the region.

The new fiber connection in part has become a focal point for new start-ups and talent. Innovators basically followed the new connectivity.

Google Fiber has "raised awareness inside and out of Kansas City of the possibilities of our tech community," said Rick Usher, assistant city manager for Kansas City, Missouri. "Businesses are relocating because the talent that they want to employ are now downtown," he said. (Tweet This)

"When Google comes to your town, and brings a brand new service that is nowhere else in the world, you get excited about it," said Matthew Marcus, co-leader of the Kansas City Startup Village. Kansas City, Missouri, and Kansas City, Kansas, were the first two U.S. regions to get access to Google Fiber.

Beyond the new technology's buzz, it's tough to calculate how much business Google Fiber has helped generate, according to the Kansas City, Missouri, city manager's office.

What it costs

One of the reasons businesses were so eager to move was Google Fiber's affordability. While prices vary, costs can range from $70 to $130 a month—comparable to Internet service offered by cable providers but at a much faster speed.

Google has declined to disclose how much it has spent to lay down fiber connectivity in the U.S., and how many customers have access. But analyst Carlos Kirjner at Sanford Bernstein estimates it cost Google roughly $84 million for the first phase of Google Fiber for the two cities.

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Once the project is complete in the two cities in the next few years, Google investment will likely near $1 billion, according to Usher.

That investment in one region alone illustrates increased fiber competition among U.S. tech and telecom companies as more consumers and businesses demand and expect faster connectivity. Telecom giants including AT&T are also investing in fiber connectivity.

What's next

Some businesses describe fiber ramp up, so far, to the early days of transitioning to broadband from dial-up service, said Rachel Merlo, Google Fiber community impact manager.

And another key lesson for residents and entrepreneurs is to be patient. Jim Lysinger, an executive for BIME Analytics, came to Kansas City from France to launch a U.S. location for its cloud-based business three years ago. Lysinger said he doesn't yet have Google Fiber access.

"The business application hasn't come as quickly as we had hoped, but certainly we are in the implementation process," Lysinger said. "This is a big endeavor.... We are going to use the heck out of that gig [of fiber Internet service] when we get our hands on it," he said.

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