If Google can pull it off, there's good reason for cable companies to start worrying – as investors already have, with Comcast stock dropping $1.96 today (Feb. 19) and Time Warner down $0.68. Google's plans start with free 5 Mbps service, $70/month Gigabit Internet-only, and $120 Gigabit Internet plus TV (which includes 200 HD channels, DVR, and on-demand content including Netflix). All plans have a $30 hook-up charge.
However, if you start adding on premium channels that's going to cost another $10 to $40 a month; bringing it close to the $180 I'm currently paying Comcast for TV, Internet and voice, and making it a trade-off for some customers.
So, what are we to make of this besides shorting Comcast stock?
One piece of intelligence that the Google Fiber launch reveals is that despite predictions that over the top (OTT) content services are the future, operating the underlying network infrastructure is still a competitive advantage.
Another message here from these tea leaves is that wireless networks still don't match the stability, reliability and performance of wired networks. And the exponential growth of mobile broadband use just underscores the importance of the wired backhaul supporting it.
I have a good chance of watching Google Fiber unroll first-hand because I live in one of the cities that's in talks with the Internet giant to one of those 34 "gigabit cities" – Santa Clara, CA. And although nothing's cast in concrete yet, Santa Clara enjoys some unique advantages as a showcase for Google Fiber – and not just because I'm an unashamed city booster.
The first and biggest reason is that the city owns its utility company. That means the city owns the poles and conduit where Google needs to run its fiber. That will expedite permitting and construction operations. (And because Santa Clara generates much of its own electricity, it costs about a third less to turn your TV on or charge up your tablet.)
The second advantage that Santa Clara offers is that a lot of the infrastructure Google Fiber needs is already in place. The city already has an extensive dark fiber backbone and it's already in business selling excess capacity to businesses and service providers.
Originally developed to link the city's electric substations, the fiber backbone was deliberately over-built and has been expanded over the last 15 years. The network not only covers Santa Clara's industrial corridor, it also reaches into residential neighborhoods to schools and fire stations. And the city already has a municipal WiFi network that was built out to support its smart meter system.
Santa Clara also has the 49ers high-tech Levi's stadium opening this summer. But Comcast just signed a 10-year deal to provide fiber throughout the stadium, as well as free WiFi for fans, so it's hard to see a Google opportunity there.
On the other side of the picture, there are questions.
One is whether Google really "gets" the level of performance required for consumer telecom service. Most of us still "watch TV," and regardless of what we want to watch on that TV, we have expectations for quality that aren't matched by, say, YouTube. People might be willing to deal with Gmail outages, but not TV outages during the Super Bowl.
And then there's history.
About 10 years ago, Google built a free, public WiFi network in Mountain View CA, and, at the time Google was widely expected to rollout similar networks in other cities and become a major ISP. As we know, that didn't happen and Google's public WiFi network dwindled into obscurity -- one reason being that it couldn't handle the traffic.
And then there's Google's dismal history with voice services, first with GrandCentral in 2008, and later with softphone Gizmo5. And then there was the short-lived marriage to Motorola.
However, Google is certainly investing a lot of marketing into this rollout. So I'll be watching with interest.