The "street" is clueless. Not only does Google have plenty of cash to burn, but this could snowball into something that pays off for them. Google has a vested interest in a faster internet, just like shipping companies have a vested interest in better highways.
Perhaps Google is going to force the hand of America's existing telcoms to provide more reasonable broadband services. Right now, they're sitting fat, dumb, and happy as oligopolists with no significant incentive to provide faster service -- as long as their competitors don't move first.<p>These "tests" are strategically similar to the Chrome browser. It's not that Google cares that it provides a fast, standards-compliant browser to the world. Instead, Google simply cares that nobody else can limit progress by sandbagging, as Microsoft did with IE6 for years. So, even if Chrome's market share is relatively low, its existence forces Microsoft to compete. And, when Microsoft does, Google wins because its net-based services are a good user experience.<p>Phone companies don't want the expense of upgrading their infrastructure to support fast Internet. And, cable companies are surely terrified of gigabit-to-the home. Why would MTV bother with the cable companies when it could just stream its shows on demand via Akamai (or whomever) and sell highly-targeted advertising?<p>This strategy also reminds me of Google's $4+B bid on the 700mhz spectrum. They didn't actually want to own it, but they wanted to be sure the US government sold it with the open access rules attached which would ultimately benefit themselves.<p>Five years from now, I think The Street will look back on this move as brilliant.
> The cost of the rollout - which will involve physically laying cable to individual homes - he thinks will be somewhere between $3,000 and $8,000 per household.<p>Curious numbers considering Verizon spends ~$700 per home to connect their fiber network. I don't see Google spending more than 10x than what their closest competitors spend. Especially when they can cherry pick an easy market for the test.<p>Still, the capital expenditure is offset by revenues coming in. At $50/mo that's $600 in revenue coming in per year for each household. Finance the construction and pay it off with the monthly revenue.<p>The toughest part by far will be dealing with the existing players. No telecom company is friendly to a new entrant.
I'm thinking it would be in the best interest of telecom giants to get in on this experiment. This is inevitably the direction their headed, and they would learn a lot from it.<p>If anything, telecoms should be bidding on the contract to lay out Googles fiber, and subsequently working with Google to own the next big pipeline infrastructures.
Google as an ISP: "We give anonymity to your data but track every website you visit. We do not sell your information but we do use it for our advertising and search results." Just a search for more data with proven annual income?