Google dives into ISP ocean; will search giant float or sink?

Google's announcement that they have decided to invest in a fiber to the home (FTTN) project will prove to be exciting and disruptive to the community that wins.  You can bet that the project will be a political and technical brawl to be selected -- and closely watched by fans and critics. Community activists, technology analysts telecom and cable providers will watch the project unfold and have good and bad things to say. The FCC, no doubt, will  watch and review the success and failures of the project, particularly if they apply for Rural Broadband funding that is available and the winning community qualifies. Initial reaction from FCC Chairman Julius Chenachowski is very excited to say the least. FCC spokeswoman Jen Howard released this statement by the Chairman:

"Big broadband creates big opportunities. This significant trial will provide an American testbed for the next generation of innovative, high-speed Internet apps, devices, and services. 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."

State and Federal officials will watch as the Google machine comes to town. Imagine the WAL-MART Goliath equivalent of cyberspace coming to your town. Will it crush the local ISP, television and radio media providers? Is this the beginning of Google's spending of its stockpile of $24.5 billion?

Very few Internet Service Providers can get new funding. If there's one company that can afford to build a new network, operate it, and make money at the same time, it's Google. There are a lot of ways the company can go about this project. Its website is not clear in its approach to network architecture and services that will be offered. Here are some likely products it will offer, everything being I.P. and cover the following services:

Voice over I.P. (VOIP), integrated to your Google Voice and Google Mobile phone.

• The FCC may require service termination to any licensed competitor

Video (Real -time, On-demand and download)

• Google will not require FCC Broadcast license (confirmed by FCC spokesperson)

Internet Broadband

• Google has stated it will share the network with competing ISP's.

Energy (Smart Metering / Heating and Air Conditioning management)

• VPN tunnel between your electricity meter / HVAC equip. and your utility

Security (Firewall, Anti-virus, House Alarm and Fire)

• Optional value add services

With the above solutions coming over a fiber network to the home (FTTN), Google would be able to offer a powerful suite of applications and services, as well as other Google products that are already available such as email and YouTube.

Google's experiment will flush out some realities that Google has to face, like customer support, regulatory compliance and the operational costs to operate these services. The business model that Google takes -- and how they will compare to traditional telecom providers -- will be a closely guarded secret.  If Google does well and expands the program, carriers like Verizon are in for a rough ride, not only by its customers, but also the FCC should they begin to file complaints.

The company is not going into this blind. Patrick Pichette, Google's CFO, is a veteran Telecom executive of Bell Canada, the largest telecom provider in Canada. He understands bundled product services and will prove to be a valuable asset going forward.

One thing is certain: Internet Service Providers in the area will feel threatened despite the announcement clearly stating that they will share the infrastructure with other ISPs in the area.

Marketing has never been a Google weakness; its foray into being an Internet provider may wind up being like a lottery show on which community will be chosen. Free publicity and people constantly searching what town or city is going to win will easily pay for itself, probably before they even install the first fiber link. Puzzling some is why Google simply doesn't buy an existing ISP, building upon the model they used when they acquired Grand Central. One possible answer is that it cheaper to build new than renovate, particularly if they build in a new location where fiber does not exist.

Google may become the Broadband version of the Titanic, and with this network, be impossible to sink.