Broadband Providers Suck. Can Google Help?

Broadband Providers Suck. Can Google Help?

Broadband Providers Suck. Can Google Help?

Google repeatedly says it has zero interest in rolling out a broadband service. Its actions speak otherwise.

For a company that claims it doesn't want to run a high-speed access network, Google has taken a remarkably aggressive approach to broadband. And given the generally sad state of affairs in the U.S. broadband market, we wouldn't be surprised if Google takes an even more aggressive approach in the future.

Today the company was named as one of several investors in 03b, a satellite-based broadband provider in emerging markets. While Google is only ponying up some of the cash to fund the business, the company is likely to be a direct beneficiary.

There is ample reason for Google to take a more active role in the broadband market. The more time people spend online, the more Google benefits. For lots of Americans, Google is the internet. When broadband access speeds are slow, people spend less time on Google properties and the company sells less advertising. It's that basic.

And Google is keenly aware of this fact. Over the last couple years it has likely spent millions of dollars lobbying the FCC to open up several bands of spectrum including White Space spectrum. It teamed up with Earthlink to roll out a municipal WiFi network in San Francisco a few years ago. (It didn't work out.) The company also runs its own WiFi network in Mountain View, California.

But some analysts say a Google venture into broadband would be misguided.

"It's not their core business," says Trip Chowdhry, an analyst with Global Equities. "How many times are people going to give Google the benefit of the doubt for bad strategic decisions? Google Muni WiFi was a disaster. YouTube is a disaster. Picasa is a disaster. Google CheckOut is a disaster. Any initiative other than search would be a disaster for Google. How can they run a WiFi network?"

But Google has a vested interest in keeping broadband widely available without restrictions, and because the high-speed internet market is a tangled mess (access speeds are slower than many nations; monthly rates are high; usage caps are becoming depressingly common; adoption is slowing) the company has reason to be concerned.

Another Wall Street analyst argues it will never happen. He says the cost of running a broadband network would easily outweigh the benefits to Google.

"I don't doubt that Google would be happier if there were no restrictions on what users can and can't do online, but they don't want to own or manage the pipes on an ongoing basis," said the analyst.

Photo: Flickr/dfb

See Also: