In the earnings announcement this week, Alphabet (the parent company of Google) shared that most of it’s $869 million in capital spend on “Other Bets” went to Google Fiber, according to CFO Ruth Porat, and that Google Fiber would continue to be a driver of CapEx spending going forward.  Assessment of Google Fiber customer service is mixed which is not surprising, since the service is new and Google is not a service company, they are an advertising company.  Nevertheless, customer adoption rates their first market of Kansas City have been high especially among middle-income and affluent households.

It’s been about 5 years since they first launched in Kansas City, KS.  Since then, Fiber has been expanding to many other cities in the metro.  A recent study by Bernstein and reported by says,

Based on a past door-to-door survey in Google “Fiberhoods” in Kansas City, Bernstein estimates Google Fiber has achieved a penetration rate of about 20% of homes passed within one year of turning on service, “putting it well on the way to exceed 40% of homes passed and realize attractive ROIs.”

The cable companies are not sitting idle.  As one example, my suburban KC neighborhood doesn’t yet have Google Fiber.  It’s on the plan this year, but already TWC offered a free upgrade to 300MB service, Consolidated is coming down on price, and AT&T is busy burying fiber to deliver their own gigabit to my house in a few months.  Google managed to changed the competitive dynamics in our market even with only 20% penetration.

Of course, time will tell if Google decides to keep forging ahead and expands to become a national marketshare threat.  In addition, they are using their brand halo and “cherry picking” areas that are cost-effective – tactics that are garnering protests from existing cable providers.  So, the quick municipal approvals and utility right-of-way access may not continue.  However, they clearly have the financial resources to invest and continue to do so.