Why Google's Competing for Your Internet Service

AT&T and other broadband companies should be more than a little scared of Google's intentions. Analysts estimate the cost of rolling out Google Fiber at about $7 billion to $10 billion by 2020 and covering around 8 million homes by the same time. So, why does Google want to enter the Internet business when AT&T, Verizon, and others are already entrenched in it?

There's no simple answer to that question, but BTIG Research outlined six main areas Google could benefit from laying fiber throughout the US:

1. Strongly encourage Internet service providers to increase broadband speeds.
2. Prohibit ISPs from disadvantaging Google through bandwidth caps.
3. Keep innovation flowing by bringing high-speed Internet to schools and other non-business entities.
4. Bridge the digital divide, bring more people into Google's services.
5. Bring YouTube to set-top boxes just like any other network channel.
6. Institute highly targeted television ads based on Web searches and TV viewing habits.

Google sees its Fiber project as a new way of doing business, not an old-school approach of just bundling TV and Internet services. In the spring, Google's VP of access services, Milo Medin, said, "We're trying to build a business for the next 10 years, not the last 10 years."