Google's plan to build an ultra-fast fiber-optic broadband network for as many as 500,000 U.S. customers is an ambitious shot across the bow of incumbent Internet service providers. The plan, which the company will roll out as a test in several U.S. cities, is designed to nudge both the federal government and ISPs to ramp up U.S. broadband speeds. The search giant also hopes the scheme will serve as a test for what it calls next-generation Internet services.Google (GOOG) will offer customers "Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections." In a company blog post, Google issued a request for information to identify interested communities. Already, Seattle is looking into the project, according to The Seattle Times.

Lighting Up "Dark Fiber"

"We're excited to see how consumers, small businesses, anchor institutions, and local governments will take advantage of ultra high-speed access to the Net," Richard Whitt, Google's Washington telecom and media chief, wrote in a blog post.

"In the same way that the transition from dial-up to broadband made possible the emergence of online VoIP [voice over Internet protocol] and video and countless other applications," Whitt wrote, "we think that ultra-high-speed bandwidth will lead to many new innovations, including streaming high-definition video content, remote data storage, distance learning, real-time multimedia collaboration and others that we simply can't imagine yet."

For years, as Google has bought up miles of "dark fiber" -- the underground cable left unused since the Internet bubble -- observers have speculated that it might one day make such a move. But Google executives caution that it doesn't currently intend to enter the Internet service business on a wide scale.

Last year, Google urged the Federal Communications Commission to test ultra-fast networks in communities around the country as part of the FCC's National Broadband Plan. "We thought it was important to back up our policy recommendation with concrete action, so now we've decided to build an experimental network of our own," Whitt wrote.

Network Will Be Fast and Open

Google said it will operate the test network consistent with its long-held support of "network neutrality," the idea that broadband providers should generally treat all Internet content and services equally. In 2008, Google bid $4.6 billion for the coveted C block of wireless spectrum licenses. Google didn't win -- Verizon Wireless did with a $4.7 billion bid -- but it triggered FCC approval of "open access" provisions requiring the winner to allow consumers to mix and match handsets and serivces, like Gmail and other Google Web applications.

"As with some of the things that Google has done in the wireless space, this 'experiment' could be Google's way of pushing the telcos to more rapidly increase their own fiber deployments," UBS Internet analyst Ben Schachter wrote in a note to clients Wednesday.

Last year, a study by the Communication Workers of America ranked the U.S. 28th among developed countries in broadband speeds. "Google is sending a shot across the bow -- we need to set far higher standards here in the United States. Our national broadband plan must take this into account, and our leadership needs to stop shying away from the challenge," Sascha Meinrath of the New America Foundation told Ars Technica. "The Recovery Act committed $7.2 billion in broadband investment defining high-speed access at most 5 Mbps, while Australia is investing $31 billion in an 100-Mbps effort. When you break it down per capita, Australia is outspending the U.S. 60 to 1."

High Praise From Several Corners

FCC Chairman Julius Genachowski, who also supports net neutrality, issued a statement praising Google's initiative. "This significant trial will provide an American test bed for the next generation of innovative, high-speed Internet apps, devices and services," Genachowski said. "The FCC's National Broadband Plan will build upon such private-sector initiatives and will include recommendations for facilitating and accelerating greater investment in broadband, creating jobs and increasing America's global competitiveness."

Other net neutrality advocates welcomed Google's plan as well. "An ultra-fast and open broadband will not only provide a new and exciting platform for the next generation of Internet services and apps, but will hopefully inject new life into the extinct third-party ISP marketplace," Markham Erickson, executive director of the Open Internet Coalition said in a statement. "We hope this will serve as an example to other network operators that the open model should not be feared, but should be emulated. Profit and openness are mistakenly seen to be in conflict; in fact we believe they are synergistic and amplifying."

Gigi B. Sohn, president and co-founder of Public Knowledge, also issued a statement congratulating Google on its plan: "This project is the kind of forward thinking and investment from the private sector that could jump-start Internet technology while helping our economy and giving consumers the experience of a true next-generation network."

What's Good for Google...

Google's move into broadband service has been widely expected. After all, a company doesn't buy up millions of dollars worth of dark fiber to just sit on it. But today's announcement is more about prodding the FCC and the broadband industry in a direction that favors Google's goals.

In the past, the company has used a variety of tactics to advance its interests, from the spectrum auction to its support of open standards and platforms. Google's modus operandi is to create conditions that induce the market to change. Just like it probably didn't intend to actually spend $4.6 billion on the C block spectrum, Google likely doesn't intend to become a major broadband provider if it can achieve its desired outcome of superfast, open networks through other means.

Increase your money and finance knowledge from home

Asset Allocation

Learn the most important step in structuring an investment portfolio.

View Course »

What Is Your Risk Tolerance?

Answer the question "What type of investor am I?".

View Course »

Add a Comment

*0 / 3000 Character Maximum