Generally when competition comes to a market, the consumers gain. That could still be the case in Kansas City (Missouri and Kansas), where Google (Nasdaq: GOOG) is rolling out its ambitious Google Fiber service in competition with AT&T (NYSE: T) U-verse and Time Warner Cable (NYSE: TWC). But according to the latest reports, the incumbents will actually be the first to benefit from the deal.
Google received some concessions from the city to enter the market. AT&T and TWC, having been around for a while, saw that and asked for the same treatment. Now they're getting it.
"We understood that [the incumbents would want similar treatment as the newcomer] when we entered the deal with Google. When we make concessions to one company, then everybody else gets that same benefit," Kansas City Assistant City Manager Rick Usher told the Kansas City Star.
First, the city will refund permit fees it charged Time Warner dated back to the time when Google and Kansas City worked out their arrangement. That means the cable company will save about $27,000 because it's already there--still less than the $100,000 Google saved on permit and other costs because it was just starting work on a new network.
Usher also told the paper that the city might allow TWC and AT&T to build "fiber huts," as Google calls them, on city-owned property for free. The huts, garden shed-sized buildings, house equipment to connect neighborhoods to the Internet.
The paper said that Time Warner, which has been a bit noisier about its demands than AT&T, is also talking with the Unified Government of Wyandotte County to get Kansas City, Kan., to match Google terms.
"We wanted to be treated the same," TWC spokesman Michael Pedelty told the newspaper.
AT&T, meanwhile, has been quieter, but it isn't ignoring the situation and also wants the same treatment.
"It's time to modernize our industry's rules and regulations to ensure all companies compete on a level playing field so all consumers benefit from fair and equal competition," the service provider said in an e-mailed statement.
Another big bone of contention is access to utility poles. Kansas City Power & Light has a confidential agreement with Google that precludes disclosing whether the new service provider is getting better treatment than the incumbents. It is known that the utility is treating Google as "neither telephone nor cable," the Star story said.
The Kansas City, Kan., Board of Public Utilities is charging Google $10 per year per pole--"a discounted rate given in return for 50 connections to Google Internet network for BPU's 'smart grid' aimed at increasing energy efficiency," the newspaper said.
Finally, there's just perception. Kansas City, Mo., officials will develop and manage a marketing/education program about Time Warner Cable and cooperate "on all publicity and public relations," while TWC said it will keep service in areas it reaches now, including some free connections, and provide space on its channel lineup for the city.
- the Kansas City Star has this story
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