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Although Google Fiber is not yet available to residential customers, select Retail Partners in Kansas City went live on Saturday, July 28th. One of these places was Mud Pie Vegan Bakery. I talked with co-owner Michael Valverde and checked out the system at his space in order to see how fast it was in the “real world.”

Valverde told me that he started seeing regulars from Google several months before the Mud Pie choice was made public. These people didn’t say they were from Google, but after Google chose the bakery as an initial location to receive Google Fiber he realized who they were.

“When I got the call [selecting his shop], I thought they were selling me ads” Valverde told me. But instead they choose his coffee shop as a place to showcase the power and speed of Google Fiber. He couldn’t tell his employees, though they suspected something was up with “all these people tinkering.” Now the shop has Google Fiber as well two Google-provided Chromebooks for customer use.

Google rarely does anything randomly, and Mud Pie is within a block of the University of Kansas Medical Center. Google constantly refers to telemedicine as a key feature of what Google Fiber can do, so picking a demo location near the Med Center allows both staff and patients to test out the service.

Testing Google Fiber.

I tested Google Fiber over Wi-Fi and over the wired connection. Obviously the limitations of Wi-Fi’s 802.11n, which can’t handle gigabit speeds, doesn’t allow the full performance of the network to be realized. For a subjective test, I streamed the Olympics in HD over Wi-Fi. The HD video was simply gorgeous, but there were hiccups. I did notice that as someone was watching a movie on one of the Chromebooks, the picture got more glitchy. But that could also be limitations of the Wi-Fi.

As an objective test I downloaded Apple’s MacOS 10.7.4 combo update over both Wi-Fi and the wired connection. Over the wired connection, the 1.4-gigabyte file downloaded in five minutes and four seconds. A test from Speedtest.net not yet optimized for Google Fiber still showed impressive results. Over Wi-Fi from my Macbook, the file downloaded in 15 minutes and 21 seconds. Another Speedtest.net showed the limits of the Wi-Fi.

The slower speed over Wi-Fi was to be expected, but with the full wired connection I would have expected the file to download in less than a minute. For comparison, I downloaded the 1.4 GB 10.7.4 updater off my AT&T Uverse connection and the download took 14 minutes and 50 seconds. As a longer wired test, I downloaded the entire Lion installer from the Mac App store and the 4.18-GB file downloaded in 41 minutes and 24 seconds. Again, not impressive speeds.

These tests show one of the limitations of Google’s Fiber network, other services. Since Google Fiber is providing virtually unheard of speeds for their subscribers, companies like Apple and I suspect Hulu, Netflix and Amazon will need to keep up. I downloaded a few (legal) torrents and while it’s hard to compare torrents at any given moment, a popular file downloaded at extremely high speeds. For example, a 134.4-megabyte file downloaded in about 11 seconds. Subscribers will pay for high-speed internet but may not notice the difference when compared with friends with top-tier broadband.

Here’s the bad news.

Another limitation may be the fact that Google appears to be using a gigabit PON based on a screen shot of an interface to the Network box. If this is the case, speed could be reduced by other users. Even if they use an all-active Ethernet approach, that bandwidth will have to compete with all those televisions and if 8 shows are being recorded at once (the full capacity of the TV and Storage box), internet could slow down. The community sites for Google currently don’t have TV so I couldn’t test this.

There are some further issues Google Fiber customer might experience. The first most popular concern I heard from prospective customers at the Google Fiber Center was lack of popular cable channels – most notably ESPN. Disney, Comedy Central and other premium channels such as HBO are also unavailable on Google Fiber.

Another common complaint I heard from visitors to the Fiber Center was that they are under contract with their current provider. They’d love to switch but have to wait until the contracts expire with providers in town such as AT&T, Time Warner, and Dish. Additionally, Google Fiber doesn’t include a landline IP phone option. While subscribers can use their mobiles phones, many people still use alarm or fax systems that need a landline. Both could be done over Internet (or via a third-party IP phone service) but this is an additional hassle to switch.

There are also potential compatibility issues users may have to face. Although Azhar Hashem, head of marketing for Google Fiber mentioned the Storage Box was compatible with Time Machine, those of us who have Time Capsules or an Airport Extreme will find those need to be reconfigured to work with Google’s Network Box. (UPDATE: Our writer was right to be skeptical about the compatibility of Storage Box and Time Machine; Google got back to us a day after the story was published and said that, in fact, they are not compatible.) Google Fiber will require that customers use the Google Network Box as their router, while cable companies typically allow customers to use any choice of router they wish.

Questions about setting up web or file servers weren’t immediately answerable due to the unfinished aspects of the Network Box, but from what I saw publicly I’m pessimistic in the ability of the box to allow a true bridge mode. If you want Google’s network you have to use their box and live with their restrictions.

Finally, there is privacy. Representatives had to assure customers that Google would not be spying on their internet use. A sign warning Google Fiber Center visitors that they were giving up some privacy walking into the Google Fiber Space was off-putting to say the least. Personally, I’m not worried but with recent violations by Google of privacy I can understand their concern.

Ultimately, Google Fiber looks to be an outstanding service for Kansas City. I’m delighted they have bucked the trend against slow speeds and obnoxious bandwidth caps. I realize that in order to control the experience, you’ll have to use their hardware but Google has everything to gain by making their system as configurable as possible. As the service becomes more popular, content systems will be forced to upgrade their networks to keep up, although that means that bandwidth could slow down for some customers in theory.

What do you think? Is Google Fiber worth the hype and the price? As a local resident (just outside) the Kansas City metro area, what would you like to see tested or what questions should I ask the next time I’m at Fiber HQ?