Google Fiber and the future of free Wi-Fi

I am on holiday in Sydney, Australia where there is hardly any free Wi-Fi in cafes, restaurants, and at the rock pools. Most people close their networks. Cafes do not open their access points to customers, or else they charge for it.

I asked several local tech entrepreneurs whose startups I’ve covered on Pajama Entrepreneur, about the dire Wi-Fi situation in Sydney. They told me that Internet access is expensive and subscribers are subject to fairly stringent data limits. Telstra, the local incumbent has, so far, managed to get away with it. But that may end soon. The Australian government has invested AU$43 billion over to build a national fiber network that will be complete within 8 years. It has already established NBN Co Limited to build and operate the network, with the objective of “providing 90 per cent fiber to the premises coverage delivering speeds of 100 megabits per second with remaining coverage through state of the art wireless and satellite technologies, offering speeds of up to 12 megabits per second, to people living in more remote parts of rural Australia.” Even the Australian government has given up waiting for Telstra and the magic of free markets.

I was examining the Australian government’s national broadband plan one morning when I came across news reports (in the only cafe near my hotel that does have free Wi-Fi) about Google’s intention to deploy experimental fiber networks in the US. Google says:

“We’re planning to build and test ultra high-speed broadband networks in a small number of trial locations across the United States. We’ll deliver Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections. We plan to offer service at a competitive price to at least 50,000 and potentially up to 500,000 people.”

Shortly after the announcement, Google decided to give $100,000 to a town called The Dalles on the Columbia River in Oregon for the deployment of a free Wi-Fi network. Google has a data center in the The Dalles, which feeds off the hydroelectric power generated by the dam at the Columbia River. The town can use Google’s data center for high speed connections to the Wi-Fi network. All they have to do is set up enough Wi-Fi access points to ensure community-wide coverage. This leads me to ask: what happened to the RFP issued by The Dalles in 2007 for a municipal wireless network? The town never deployed the network because it did not get credible responses to its RFP, according to my last inquiry in 2009. Now that they have received money from Google, let’s hope they build one that is an example for other communities.

The question is will Google do the same for other municipalities where Google is installing a fiber network or where the company has a data center. This is an interesting project for Google since many more people today have portable devices that run on Wi-Fi and use a lot of bandwidth. Cellular networks have suffered most from the voracious appetites of iPhone users around the world and carriers have barely been able to keep up with the demand. We will soon find out whether the iPad will have a similar effect as the iPhone since it is coming out with a WiFi + 3G version in addition to the Wi-Fi only version.

Google has every incentive to lower every single barrier to online access. The company makes it money from search advertising. The more search moments there are, the better they do. Cheap high-speed (fiber) Internet connections in homes and offices and free Wi-Fi outdoors, in cafes, airports, and other locations — all of these encourage people to browse web pages on laptops, iPhones, Blackberries, netbooks and soon, the iPad. If there is one company on earth that stands to benefit directly from free or very cheap high speed access, it’s Google. I can’t tell you how many times I’ve found myself standing in the Sydney central business district (CBD) wanting to pull up Google Maps on my iPhone to find the address of a restaurant or office (but I can’t because there’s hardly any free Wi-Fi in Sydney and I don’t want to be charged by AT&T for data roaming).

So back to Google fiber. What they are doing is providing the middle mile, which in many places is too slow and too expensive for local ISPs. Google does not want to be the last mile ISP to your house or office; it wants to lease out a lot of bandwidth at very low rates to local ISPs so they, in turn, can provide cheap Internet access. Google’s network will, hopefully, provide ISPs with more choice. In addition, I expect Google and other companies to sponsor free Wi-Fi supported by advertising (see latest Devicescape report showing that people will not pay for Wi-Fi but will view ads).