As Google Fiber’s launch in Kansas City gets closer and closer, the company’s biggest competitors are asking that the city give them the same royal treatment it has given to Google.
Time Warner Cable Inc (NYSE:TWC) and AT&T Inc. (NYSE:T) are reportedly asking that Kansas City extend to them a so-called “parity agreement,” which would provide the two companies the same advantages already given to Google Inc (NASDAQ:GOOG). The list of benefits Google Inc (NASDAQ:GOOG) received is long, and includes perks like central office space, expedited permitting, exemptions from fees, important rights of way, and event a discount on telephone pole access. Whereas most companies pay $18.95 to string their wires on telephone poles in Kansas City, Google Inc (NASDAQ:GOOG) gets to hang its wiring for a cut-rate of $10 per pole.
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Time Warner Cable Inc (NYSE:TWC) and AT&T Inc. (NYSE:T), which have been operating in the city far longer than Google Inc (NASDAQ:GOOG), and currently control most of Kansas City’s Internet market, now feel that the perks given to Google allow the newcomer an unfair advantage. The two companies have argued that their proposed parity agreement is important to maintain a competitive balance amongst the city’s various telecom providers.
“There are certain portions of the agreement between Google and Kansas City, Kan., that put them at a competitive advantage compared with not just us, but also the other competitors in the field,” said Alex Dudley, a Time Warner Cable spokesman. “We’re happy to compete with Google, but we’d just like an even playing field”, he reportedly told the Wall Street Journal.
But before Kansas City gives AT&T and Time Warner the same benefits it has already given Google, the city is likely to ask that they step up the services offered to Kansas City citizens. Google Fiber offers Internet services far beyond what the other providers currently carry. These include 1 GBPS Internet access and Gigabit+ TV, which has a full lineup of cable channels and a 2 TB storage box, for downloading television shows.
Google’s gigabit Internet service will also be relatively cheap. Kansas City citizens can subscribe for only $70 a month; other Internet providers charge nearly $300 for equally fast access. And for those who don’t need gigabit speed, Google is offering seven years of 5 Mbps access (roughly equivalent to what most broadband services now provide residential customers), which is free after a one-time set up cost.
This gives Kansas City a major chip to throw on the bargaining table. The city can choose to give AT&T and Time Warner the same perks as Google, but first it might well demand they step up their services to match what Google Fiber offers.