The short answer is: it's much easier to build in a greenfield environment where there is a "helpful" local government, ready access to rights-of-way, and underserved population, easy construction costs, access to labor, favorable tax climate, and a host of other reasons that come before "lots of people who want gigabit speeds".
The economics of building (or overbuilding) a gigabit fiber network drive you towards areas where you can get a high degree of penetration for your investment. That's not going to happen in a place like NYC or SF. The construction costs (directional boring) and tax regime (network cables are "property" for property tax purposes) mean that SF and NYC are probably going to be the LAST places to get Google Fiber.
WUT.
In TX, colo providers have had to send business property tax bills to people who locate their servers in those centers. Sometimes those bills are quite shocking.
In CT, the local phone companies started putting DSLAMs on poles because it got them off the ground and saved them millions on property taxes because there was a rate differential between property that was pole attached and property that was on the ground.
Never underestimate the effect that taxes can have on the deployment, operation, and maintenance of business property. You can explain great deals of financial shenanigans to the real savings associated with avoiding taxes.
And who gets screwed? Anyone who doesn't have the scale or size to make avoiding that tax worthwhile. e.g. the small-business owner.
http://www.noevalleyvoice.com/2013/May/Att.htm
The challenge to ATT's plans was manifold:
1) ATT refused to put their equipment underground. SF's sidewalks don't need more cabinets.
2) U-Verse is DSL service. Sonic.net already offers 40mbps DSL service in SF, so U-Verse is not that much faster. Why does SF need more cabinets to get pretty much the same data service from the incumbent telco?
3) ATT is putting cabinets on the sidewalks, and running fiber to those cabinets to serve ~45mbps connections to folks ~800 feet away. If ATT had planned to run fiber from those new cabinets into residences ~800 feet away and provide 100mbps or 1gbps service, folks would have welcomed their project.
4) Monkeybrains [0] and Sonic.net [1][2] have had (for several years) workable plans to eventually deliver 1gbps service to the whole city with (they say) far fewer aboveground boxes that ATT "requires" for U-Verse, and don't even need to dig up the street to lay the fiber. I'm not sure why they've been ignored by the Mayor's Office and the DPW.
[0] https://www.monkeybrains.net/DPW-MonkeyBrains-March-2011.pdf
[1] http://corp.sonic.net/ceo/2010/07/14/micro-trenching-at-soni...
[2] http://corp.sonic.net/ceo/2011/12/15/sonic-net-plans-gigabit...
If Sonic / Monkeybrains can deliver 1gbps, all the better.
I see this as a huge step in the right direction and cannot wait to see how it turns out.