A plan to offer free gigabit service over the liNKCity network in North Kansas City might never have come to pass were it not for Google Fiber – even though Google has no involvement in ownership or operation of the network.
North Kansas City’s city council earlier this month approved a plan for data center operator DataShack to operate the city’s liNKCity municipal network for 10 years and to share profits and losses with DataShack. liNKCity is a municipal network built about 10 years ago using casino proceeds. Since then it has struggled financially, with the city of North Kansas City reportedly spending about $200,000 to cover the costs of operating the network in its last budget.
The Google/ liNKCity Deal
The city earlier this year was considering a sale of the network until Google Fiber happened to step in. The Internet giant was looking at extending the gigabit network it had built in Kansas City proper and entered into a lease agreement, reportedly valued at $3.2 million, to use liNKCity fiber to support that move.
This apparently eliminated the need to sell the liNKCity network and paved the way for the city to enter the deal with DataShack. According to news reports, the agreement includes a $150,000 cap on losses for the city.
DataShack believes it can make the network profitable, even after offering free gigabit service to residents for seven years. (Those residents wanting service will have to pay an installation fee.) A DataShack managing member told the Kansas City Star that “the business customers are the much bigger part of the operation” – and the company apparently believes it can boost that business substantially.
That would appear to be a realistic idea, considering that DataShack should be able to offer attractive pricing on connectivity to its data center, enhancing the data center’s appeal and generating more business for liNKCity. DataShack and linKCity’s proximity to the Kansas City Google Fiber network also could be beneficial, as it too could enhance the appeal of North Kansas City’s data center and connectivity options.
One thought on “Google/ liNKCity Deal Helped Support Free Gigabit for North Kansas City”
Here's the thing: colo, particularly on the low end of things where you're competing with cheap cloud offerings, is a thin-margin business normally. However if you can get companies to outsource their servers to somewhere that might as well be on the same LAN, albeit with better reliability stats, then you end up with a solid value proposition that a standard colo provider wouldn't be able to match. So I wouldn't be surprised if DataShack offered business connectivity with a full gigabit into DataShack's DC, but with lower connectivity to the outside world based on price per month. That makes 'net access and colo both stickier products, which makes them more profitable.