What does (or can) Google Fiber mean for OTT Phone Services?

Google, and perhaps others to follow, is planning to bring super-fast broadband to different U.S. cities, with Austin, Texas, tipped as being the next major deployment after its launch in Kansas City, Mo.

Many pundits have commented about what this means to both Google’s ambitions to become an ISP or to the competitive environment in the major markets it enters as a broadband provider. The competition will be the likes of Verizon FiOS or AT&T U-Verse or a major cable company like Time Warner in Austin and major cable-system operators Comcast, Cablevision and Charter elsewhere. 

One thing is certain: Our nation as a whole needs superfast gigabit broadband and will benefit economically from Google’s entry as a service provider that drives competition versus other providers.  Competition brings consumers and businesses more choices, spawns new businesses and causes productivity to rise. Washington knows that the value of bringing high-speed Internet to all corners of the U.S. will boost the economy and more broadband capacity will mean services providers of all stripe, especially those in the cloud, will see opportunities to offer businesses and consumers innovative alternatives to the major carriers.

Indeed, it will be interesting to see  what a new, uber-fast broadband ISP might mean to providers  that supply dial-tone and a host of value-added services.  Some might call these services “Over The Top” (OTT), but I prefer to think of these innovative offerings as value-added services, which is why the Google move to deploy broadband in many markets could have a positive impact on the growth and trajectory of OTT services and on the value-added providers that deploy and market them.

In the past, there were several debates, some of which reached the FCC or state regulators, addressing “fair play” when bandwidth owners – including Verizon, AT&T, Comcast and the like — could control and perhaps did control the quality of broadband for services that competed with their own. Most notably, these included voice over IP services, such as Vonage or even Skype.  The issue of “net neutrality” has also been discussed for many years and has been addressed to some extent, but I am not certain that the problem is really solved or over.  It all depends on whether Google decides to play the same game as the big traditional carriers, or if it forgoes the old monopoly mindset and truly competes against the old guard carriers and encourages new services to ride on its broadband fiber network.

So what does Google’s broadband mean to VoIP?  It certainly does not seem as though Google is going to supply its superfast broadband as a standalone service without TV and other services. The company is already offering Google TV in Kansas City.  Will it also become a phone service provider? Will it remain with its current voice, chat and video offering?

If Google will honor “net neutrality,” its network’s faster speeds and more bandwidth will spur greater demand and increased IP use and better quality IP.  For the OTT and value-added service providers, that means their services will work better and be “closer” to more households and primarily small businesses.  OTT / value added services bring a tremendous boost to small business. Different cloud-based solutions improve productivity and connectivity. Superfast broadband will just fuel the growth of such services even more than today.

The danger is if Google builds out this network and then starts acting like an AT&T or a Comcast – for example, if it offers full TV service as we know it today, or if it offers a commercial phone service and then makes network-design decisions to give higher-quality / more-accessible IP to its own service and hurts the competition, or if it attempts to charge OTT service providers as well as end-user customers for use of its broadband — then we are taking two steps back.

Like any technology for communication and commerce since before the turn of the last century, bigger is better: new roads, better ships, shorter trips, aviation and telecom etc. ; now bigger data pipes will contribute to the economy of the city. A faster and greener economy outlook will cause more businesses to open and OTT services can become more of the norm.

So if Google keeps everything neutral, those customers will have a chance to enjoy OTT services as one of the best and more cost-effective business phone services, at a fraction of what they used to pay.

On the other hand, if Google’s service ends up being just a faster version of the incumbents’ broadband, then eventually it and the incumbents will end up competing with one another.  Personally, I would like to see companies like Google enter the market for faster broadband not to offer their own “everything” but rather to serve as a super utility and allow startups and other new offerings to flourish without the threat of the incumbents changing the playing field.  Google should stand to benefit from such an open market.

Yes, Google can offer its own video conferencing and its own chat and its own many other apps and services, but if it  focuses on doing everything just like the current broadband  incumbents, then I don’t see the greater good.  Google will fall into that same trap of being no different than the big telcos and cable companies.

Also, what is still missing from this new Google service is the mobile aspect. Google is already offering free Wi-Fi in some citie,s but that is not the big picture. I would anticipate that the focus on Gigabit fiber could impact the efforts on the mobile front, but mobile uses spectrum, a resource that is limited, while adding more fiber strands brings more capacity to where wireless can’t always. Another reason to stay away from the “offer everything” approach.

Overall, I welcome superfast Gigabit broadband. America needs it. It is not cheap and whoever provides it needs to get paid for offering it. I believe the model has to be different from the ones the current incumbents offer. That will bring more openness and many great value-added services that are both business changing and life changing.