They had a contest with cities vying to be the first. Kansas City won. Not sure why. That said, the service will spread if it's successful in KC. The residents there better not screw it up.
Rumor around KC is that Google wanted to piggyback off existing infrastructure and KC was ideal. The story is a Google exec walked into a meeting with KC city officials wearing shorts and flip flops and told them if they didn't collaborate, he was going to every news station and paper in town and tell them they are the reason Google is not in KC.