What to make of Google’s new ambitions—or delusions—of becoming a broadband force offering blazing bit-speeds that will make AT&T and Verizon and Comcast cable look like dial-up?
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A sign is displayed outside of the Google headquarters in Mountain View, California.
At first glance ya gotta love it for pure, chutzpah. The powerhouse of Web search sticks a thumb in the eye of the biggest carriers in the world—the same titans that Google needs for its Android cell-phone system, a new Googlefone and its expanding efforts in mobile-ad search and, someday, in on-demand video.
But on second glance, I just don’t get it. Instead of the bold innovation this Google gambit is supposed to display, it strikes me as yet another sign that Google’s ego is out of control. This company, so great in search, has the hubris to believe it can accomplish almost anything in most any other field.
Google has no core competency, nor much financial upside, in managing some massive fiber-optic network for users. Rarely is it good business sense to pick a fight with a couple of rivals that have over $100 billion in annual revenue, apiece. They tend to crush you. And most important of all, Google seems to forget that it is, above all, an advertising company; it uses search as the freebie to lure in customers who then click on nearby ads.
Thus we see Google, which still relies on ads for 98% of its business, spending (or squandering) multiple millions of dollars on new a new cell-phone handset business, new cell-phone internal software, new online music links, the Chrome operating system for PC’s, a suite of old-function software applications, Facebook-like features for its free e-mail service, even a fix for green energy. Not to mention a $1 million prize for the first private team to mount a rocket trip to the moon.
And now this: Google as broadband provider. Is swaggering, omnivorous capitalism at work here, or has this company lost sight of its real raison d' etre?
Google loyalists say not to worry. “I can say with 100 percent confidence this is not some sort of first step toward a nationwide network,” says one person familiar with Google’s plans. “This is an experiment. Anytime Google does something, you people assume it’s bigger than it is.”
Okay so it’s an experiment—but at what cost? Google could spend half a billion dollars on this little bandwidth test. It foresees serving up to 500,000 subscribers, and industry sources peg the likely cost at $1,000 per home, and that’s just to get service started.
Maybe some other motive drives this bandwidth blitz. Google has pushed hard at the Federal Communications Commission for “net neutrality” rules, and the FCC has been all too willing. Google’s big fear is that, one day, a giant carrier could relegate Google searches and Youtube videos to the slowpoke lane while delivering the carrier’s own content at super-fast speeds.
I’d like to think that customers themselves would revolt and force, say, Verizon to reverse such an abusive practice, if ever it took hold; the free market imposes its own discipline.
But the FCC, prodded by the guys at Google, essentially seeks to put price controls and behavioral restraints on private networks funded by the shareholders of AT&T, Comcast and their ilk. The FCC wants to force them to charge fat-data rivals the same access fees they levy on dinky Web sites.
It’s a tacit network nationalization that would inspire Venezuela strongman Hugo Chavez.
Google this week went to great pains to stress the “openness” of its non-existent network: “We welcome AT&T, Comcast and any other provider to offer services over our open network. And we hope to make public what we learn through this experiment so that everyone can benefit.” Google as Goody Two-Shoes, who wudda thunk it?
The FCC, through Chairman Julius Genachowski, rushed to second that emotion. “Big broadband creates big opportunities,” he intoned, hailing a “significant trial” and job creation and global competitiveness. And apple pie and puppies, too.
What a crock: Google gets FCC praise for “opening” its as yet vaporware network, on which the company could invest maybe half a billion dollars. Meanwhile the big cable companies have invested $161 billion in 13 years, and AT&T and Verizon have put up over $20 billion in the past four years adding video to their nets.
To a brass-hat bureaucrat at the FCC, apparently the scale of your investment should make no difference in your eagerness to let rivals freeload on your data highway.
In fact, this broadband “experiment” was put together at Google by an internal SWAT team—the Alternative Access Team—that includes some of the Googlers who are waging the campaign to put net-neutrality restraints on the telecos and cable guys.
Thus this bandwidth blitz, on closer inspection, looks more like an expensive PR ploy aimed at vexing the carriers and enchanting Washington. So far, alas, it seems to be working.
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