Unfortunately the telecom companies should be able to keep Google out of larger markets with zoning laws and political power. I severely hope to be proven wrong, however.
Most of what the telcos have going for them are barriers to entry and a nice duopoly.
The barriers they have to entry might be significant to you or me, but they are pretty trivial to Google, especially in the wired space. In the wireless space they still need to overcome the insane bidding for spectrum that the duopoly permits.
Google needs KC to prove that the $70 price for fibre is not 'below market', once they've rolled out a profitable fibre service @ $70 per month they can roll into markets full of regulatory capture and the FTC will be largely unable to say that they are using their search monopoly to undercut telcos.
If they don't offer phone service the telco is even more screwed as that's where most of the regulatory power is.
I used to live in a city which had only one ISP. They have a deal with the city that restricts building of infrastructure from competing products (just a rumor - but competing ISPs just so happen to be available in smaller surrounding cities 5-10 miles away).
I'm not sure if this is common in other cities, but it really wouldn't surprise me one bit.
When the majority of voters are clamoring for Google Fiber or the equivalent, things would change in a hurry, to ensure politicians' re-elections. Putting Google Fiber somewhere creates demand elsewhere.
The politicians in KC greatly supported the movement in an effort to boost entrepreneurship in KC. They are working on a program called LaunchKC (http://launchkc.com/) to foster tech innovation
