The Economics of Google Fiber and What it Means for US Broadband

For Google, delivering gigabit internet access over fiber for $70 a month (and even free 5 Mbps fiber) is a business that will not only help advance Google’s consumer goals, but also make it money.

“There’s no sense selling a product at a loss,” said Google CFO Patrick Pichette. “But it’s not only about profits, it’s about changing the access costs.” His goal and Google’s goal is to bring the same efficiencies that have helped create cheaper, smaller and more powerful computers and create a cost and improvement curve for broadband access. And Google may have a found a way to do that — both in terms of constructing and operating a fiber to the home network — by using its engineering team, existing consumer technologies such as QR codes and social engineering to influence how users sign up for access. Existing ISPs should take note — what Google has done here has fundamentally lowered the cost of building and deploying a network. It was cagey about if and when it would take its fiber-to-the-home show on the road, but if it does, it will pummel existing ISPs on price and service, have repercussions throughout the carrier equipment industry and entice a lot of end consumers to take on a more active role in marketing Google’s broadband.