Google to Set Up High Speed Internet; Challenges Broadband Suppliers to Keep Up

While internet usage in the United States continues to grow, some fear that the lack of broadband access creates a serious obstacle to continued economic and intellectual success. While some make the claim that broadband providers, like cable providers, are natural monopolies, those claims have yet to be justified by the Securities Exchange Commission or the Federal Communications Commission. Others, like Google, are taking steps to directly challenge the offerings of these providers.

Back on February 10th, Google made the quiet announcement on their blog that they would choose a location to test a new high speed fiber optic line capable of providing speed of 1 gigabit a second using a fiber to home setup. While Google states that this is 100 times faster than the speeds current customers are used to, there is a limit to the goodwill that Google can shower on consumers. In the same statement, the company has said that they will bring on board 50,000 customers during the initial test, with the possibility of opening it up to 500,000 customers. That statement alone has set potential customers scrambling to participate.

While Google has stated that it will limit its initial offering of the super broadband access, communities and individuals have taken to trying to make their hometown as welcoming as possible. Some communities, like Topeka, Kansas, are taking the high-profile route. During the month of March 2010, Topeka has proclaimed that its name has changed to "Google, Kansas," as a form of self promotion in show of support of Google's program.

Current Internet Service Providers, or ISPs, are not exactly thrilled over the development of this program. Under current programs, telecommunication companies control the access to the internet. Companies like Cox Cable, Time Warner, AT&T and others, are essentially gate keepers to the internet. It is sometimes odd to consider that the internet is free to access, but consumers pay the telecoms to use their infrastructure. In this way, some consumers are "double charged" when they use services like AOL as a dial-up connection.

The economic advantage, in the macro sense, is huge for the location that Google chooses. In line with the blog post, Google aims to increase competition in the selected markets. This increase in competition, in traditional economics, will force competitors to reduce consumer cost or lose market share. At the same time, a given company could choose to try to match Google's internet access speed, but that seems unlikely given the technology and cost outlay that Google is willing to put forward. In essence, this is much like a Wal-mart opening in closed off town. Smaller ISPs may close, but the macroeconomic savings to the consumer should be quite large. Then again, the entire plan could backfire and Google's test of new technology become more troublesome for consumers who switch.Regardless of how it turns out, this will be an interesting show for all. If Google's test works, then it could signal a new era in the Information Age. If not, then we can expect more of the same from our current ISPs. When it finally goes online, the whole world will be watching Google, a move that's good for any company.