IP Democracy: A New Broadband Access Model From Google?

Published reports about Google’s San Francisco WiFi proposal suggest the company is exploring what would essentially be a new model for broadband access, a model Google seems particularly well positioned to pursue.

In such a model, Google would use a wireless network to provide free 300 kbps access coupled with a mix of Google-delivered location-based services, including ad-supported search and integrated communications. Users would not pay for these services, nor would the government of the municipality in which the network was deployed. Google would also wholesale network capacity to other service providers.

According to Om Malik’s reading of the Google WiFi proposal:

[T]he company says it will be offering wholesale access to other service providers, who will offer higher throughput connections to their customers. Google says it plans to use its own authentication services. (That explains the Google WiFi VPN client to some extent)…The Google Talk implications on a free network are quite far reaching, if you ask me.

The New York Times’ John Markoff also picks up on the wholesale aspect of the proposal, though he uses the term “premium services” rather than “higher throughput connections.”

The company said its service would be an “open” one and added that it had proposed wholesaling wireless bandwidth to third parties that might be interested in selling premium services.

According to the Wall Street Journal:

[Google] is especially interested in testing out future services and advertising systems that take advantage of knowing a user’s location, which would be possible through offering such wireless Internet access.

Om conveys a sense of what Google and city officials might be thinking:

“San Francisco will be a true test bed for location based services and applications,” says Chris Sacca, principal of new business development at Google. While the initial use of location-based services might be limited to more-focused and targeted advertising, the potential of location-based services is immense, officials said. Sacca pointed out that the network bid was in line with Google’s thinking on delivering answers anytime anywhere to anyone, and looking beyond a desktop PC.

The San Francisco Chronicle cites skeptical comments from an Earthlink executive, who questions Google’s qualifications and the viability of its “free-service” model. His comments also highlight the difference between this potential Google-Access model and today’s subscription-based broadband access and ISP models.

Donald Berryman, EVP and president of municipal networks for Earthlink, questioned if Google had the know-how to be an Internet service provider. He said providing the deal for free is also not sustainable in the long run.

“We’ve looked into free service and we haven’t found a model where free works,” said Berryman. “At some point free becomes less sustainable because there’s no way to upgrade service and the networks when no one’s paying for it.”

But the Chronicle also quotes Chuck Haas, CEO of MetroFi, which runs two WiFi networks in Cupertino and Santa Clara:

[Haas] said the idea of free service is not entirely far-fetched. He said his company submitted a proposal in which wireless broadband would be free across San Francisco but would be paid for with ads and would have no technical support or services for users. For $19.99 a month, subscribers would get enhanced service with no ads and customer support.

“I believe we’ll have enough people that want full security and customer support with no ads that we could make money,” Haas said. “But no matter who the city chooses, I don’t think the city will have to pay for this network.”

Google’s move to enter the broadband access market could even impact developments in Congress, which is considering various approaches to a Telecom Act rewrite. Among the more contentious issues addressed by various draft bills are network neutrality, municipal broadband and privacy, all of which are raised—and with a somewhat novel twist—by Google’s WiFi proposal.

The move also comes at a time when Google faces increasing competition in its core search advertising business, including Microsoft’s recent launch of a system that, according to the NYT, “allow[s] marketers to aim ads on Web search pages to users based on their sex, age or location.”

Google argues that it does not need to use demographic data to direct its advertisements, as traditional advertising requires, because Web searchers can directly indicate what they may want to buy through their search queries. “We are very heavy on user privacy,” said Tim Armstrong, the vice president for advertising at Google. “So our way of targeting advertising relies heavily on what we know about the content people are looking for.” He added that Google does take other variables into account, like the time of day and the location of the user, but Google’s technology does this automatically to make the process simpler for the advertiser.

Armstrong may have a point. Who needs demographic data when you can track every click of every network user and know exactly where and when each keystroke is made as today’s increasingly mobile online population goes about its day?…I don’t know if that’s really cool, really scary or both.

Posted by Mitch Shapiro on October 1, 2005 2:14 PM to IP Democracy