There are really two costs for installing fiber. The cost to drag it past your house, which is expensive, probably over 1000. And the cost to bring it from your curb to your house. I've heard 500 for that, but it could around 300. Or google could just think of it as an advertising cost.
The $500 figure is probably correct - I'm guessing Google is assuming a conversion rate of some of those customers at $300 turning into paying customers, and thus they'll get back part of the subsidy. 5mbit internet blows, and most people will probably want to upgrade.
I would happily pay that cost up front in exchange for a guarantee of being charged just the service cost afterwards. If only that was an option on the gigabit side.
