While we won’t see the fruits of this work anytime soon, this could be the start of a great thing. Over the next 5-10 years Google could become a strong national ISP/cable provider in USA, but also in some countries in Europe, because they’ve started building their 1 Gbps fiber there, too.
The best part is they are starting strong with this, with the bleeding edge technology. They are not fooling around with 10 Mbps, or even 100 Mbps, which is starting to become pretty common in Europe for a low price, but is still way too expensive in USA. They are directly starting with a 1 Gbps connection, and I think they will try to price it as cheaply as possible, at cost.
But why does Google want to become an ISP/cable provider anyway? There are several reasons for that. One would be that currently there’s little competition in that space, and the ISP’s/cable providers basically have local monopolies in certain areas of the country. Customers have very little choice in changing the Internet/cable provider in general. Plus their services are expensive and of poor quality, and sometimes they even take the liberty to throttle their customers if they don’t like some services they are using.
Google wants to change that. They are a web company, that also owns the largest video site. They want to make sure that in the future these cable providers won’t give them trouble and charge them for the content. In some ways they are already giving trouble to Google, and that’s with Google TV.
It’s very hard for Google to co-opt the cable providers and the networks to support Google TV, because it disrupts their main business. This is why Google needs a direct way to the user, with no obstacles from the networks and the cable providers.
Google wants to offer the whole stack. They want to offer the cables leading to your house, the devices (Motorola set top boxes), the OS (Android), and the content from multiple sources, including their own such as Youtube.
Could Google become a carrier, too? They are probably thinking about it, but I don’t think they will do it in the next 5 years or so. The reason for that is that the carriers are still their partners for the most part, and they don’t want to upset them too much, which is why we haven’t seen a built-in VOIP service from Google yet.
But if T-mobile gets acquired by AT&T, and things turn out worse and worse not only for the customers, but also for Android, they will probably make the move to become a carrier, too. When they do, you can be sure they will use 5G or whatever cutting edge technology is available then, so they can leapfrog the existent carriers.