Google recently announced that it was expanding Google Fiber, its gigabit internet service, to four new regions, for a total of 18 cities. Although the Fiber initiative has been around for a year or two, the recent expansion to a number of larger regions – including Atlanta, Charlotte, and Nashville – makes it seem as though Fiber is less of a novelty initiative and more part of a long-term strategy.
And Google isn’t only laying wired infrastructure; it’s also renting wireless spectrum from cell phone carriers like Sprint and T-Mobile, presumably in preparation to offer customers a “pure Google” experience, beyond just the handset itself.
I’m certainly no legal expert, but if Google continues to snap up both wired and wireless infrastructure, I imagine they may face further anti-competitive hurdles. Let’s say, for instance, you’re a video editor living in Austin; you would, presumably, use YouTube (Google content/service) on your Android phone (Google software, at the very least), using either LTE spectrum rented by Google, or WiFi pumped out by Google Fiber. It certainly has a hint of early-20th century Standard Oil, doesn’t it? MG Siegler rightly points out that Apple is a sort of inheritor to the mid-2000s money-minting tradition of ExxonMobil and Shell. I would argue that Google may, conceivably, come to resemble Exxon and Shell’s last-century forebears, in terms of its market placement. It will, after all, own the content, own the method of consumption, and it will own the delivery network. It’s vertical integration for the 21st century.
And all of this, I imagine, comes with considerable data-mining (and therefore, advertising) potential for Google in the long run, and so the capital expenditures – and I’m sure they’re high – may prove to be worth cost. Since internet usage is rapidly shifting from web browsers, like Chrome, which can track all of your web habits (and therefore serve up great advertising data for Google), to segregated apps (which remove Google from the equation), Google obviously needs to develop a strategy that reduces its reliance on its search platform. By stepping outside the search box, it can, conceivably, execute a lot of its data mining by being a web provider, and not just a search engine.
If all of this sounds conspiratorial, know that I welcome Google’s entry into wired and wireless internet. The competitive landscape is meager in nearly all categories: wired phone service, wireless phone service, cable television, and home internet are virtually dominated by a small handful of large firms: Verizon, AT&T, Comcast, and TimeWarner. Since Google’s entry into new markets would not, by any means, give it the same degree of pricing power or monopoly that the aforementioned firms wield, it would, I hope, escape regulatory scrutiny long enough to inject competition into otherwise stagnant markets. And frankly, if Google knows my shopping habits, it’s a price I’m willing to pay.