Why Google is working hard to be your next Internet service provider

Google just announced the winner for its Google Fiber project, and it’s Kansas City, Kansas. Congratulations, Kansas City! The announcement couldn’t arrive at a more crucial time. Following AT&T’s announcement that it’s buying T-Mobile and ongoing bad news like Comcast and Time Warner Cable trying to get rid of competition by using/buying the U.S. government. For the people of Kansas City, Google is like a knight in shining armor coming to free them from the evil and monopolistic Telcos.

Google will start working on the infrastructure later this year and plans to offer service at the beginning of next year. The service consists of mind-blowing data speed (1 Gbit/s to be precise) offered at a competitive price. “Competitive price” means dirt cheap in Google language. This is Google after all, almost everything they offer is free. Plus, I don’t think they’re doing this for the profits. So, it’s official, Google will be an Internet Service Provider next year, at least for the people of Kansas City that is. After years of rumors and denial, Google will finally become an ISP. The questions is: How big of an ISP do they want to be?

Before getting into how big will Google Fiber become, we first have to take a look at why Google is doing this. First, they’re not doing this because they believe becoming a service provider is their next 1 billion dollars business strategy – although it wouldn’t hurt if it were. But that’s not the main reason why they’re doing this. Secondly, they’re not doing this as an act of charity. They might be one of the most lovable and consumer-friendly companies around, but they’re not that awesome. Instead, they’re doing this because a faster and bigger Internet benefits Google. More people using the Internet equals higher profits for Google from its massive ad business. And a faster Internet means more people visiting more websites, meaning they use Google more. Put simply, Fast Internet + Big Internet = Happier and richer Google.

This is easy to understand if you look at other products out of Mountain View. Chrome, Android, Chrome OS, and Google TV all make it easier and faster for people to access the web. HTML5, Native Client, and WebGL; Google heavily supports all these projects because they make a faster and better Internet. Basically, most Google products benefit the Internet or make people use it more. Which in turn helps their bottom line. Google is just like any other web company, they’re not the Gandhi of corporations. The only difference is that they get richer by giving us a faster and better Internet – everybody wins.

Then there’s the “choke point”. Google doesn’t like choke points. By choke points I mean places where another company controls how the user accesses Google’s products. Internet Explorer and Windows are choke points. Microsoft controls them and uses them to compete against Google by making Bing the default search engine. Thus we have Chrome and Chrome OS. The iPhone is a choke point. Although Apple doesn’t have a competing search engine today, it could very well have one tomorrow. What if Microsoft pays Apple to make Bing the default on the iPhone? Google can’t let that happen. Thus we have Android and Google TV to some extent. You get the point. The less barriers between Google and the user, the better. Which brings us to the last choke point, Internet access.

There’s no doubt that the Internet access situation here in the U.S. is going from bad to worse. On the wireless side, you have AT&T set on going back to the “good ol’ days” and becoming the only carrier in the country by buying or destroying everybody else. On the wired side, you have the likes of Comcast, Time Warner and AT&T (again) working ferociously on finding new ways to screw the consumer with high prices, low speeds and horrible service. Google is watching all this, and they don’t like the fact that a couple of companies could soon stand between them and their users. What if AT&T or Comcast gets so big that they can tell Google “Hey, I need a percentage of what you’re making from ads or I block the whole country from accessing Google.com”. (Update: A reader’s comment helped come up with a more realistic scenario, Microsoft pays AT&T to make Bing faster than Google.) Google would have no choice but comply or it would risk losing the whole U.S. market to competitors like Bing.

Google is not going to sit back and watch some company become the sole gatekeeper of the Internet. That’s where Google Fiber comes in. Google Fiber is to Telcos what Google Chrome is to Internet Explorer. A nuclear bomb aimed directly at the last choke point between Google and the consumer. How much will Google push its broadband service?. Well, this is what they said on their blog today:

We’ll also be looking closely at ways to bring ultra high-speed Internet to other cities across the country.

Yep, that sounds like a nationwide rollout in the making to me. If I was somebody at Comcast or AT&T I’d be looking very closely at what happens to my market share in Kansas City next year. I wouldn’t be surprised if Google Fiber takes over a good chunk of the market very fast. Once the American consumer gets used to 1 Gbit/s cheap Internet access it’s hard to go back. Of course, we have yet to know the details of Google Fiber, like how they’ll offer customer support, pricing, etc. But whatever they offer, I bet it’ll be better than what we have now. In conclusion, in the not-so-distant future we’ll be using our Android phones, and our Chrome OS laptops connected to Google Net with a 1 Gbit/s connection. No choke points whatsoever, just like Google likes it. I’d love to hear what you guys think about Google Fiber, so head to the comments section and fire off.

 

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