I was reading an article over at Weblogs' Google page that said that Google has no plans to become an ISP (story here), with the exception of their WiFi efforts over in Mountain View. My prediction is that they will become an ISP in the future, or at least a hybrid of one, in order to combat the Net Neutrality Bill that is speeding thru Congress. (Which, to my amazement, is hardly discussed in this forum. Pls inform me if I am wrong) They will essentially corner the market if they can offer high speed access, because the only alternative will be the current telcos who want to charge the big companies like Google, Yahoo et al a premium to deliver high speed access. Call it "information superhighway robbery" Google recently invested in FON, whose aim is to sell Linksys and Buffalo wireless routers for only $5. In exchange for the discounted price, you share your wifi access with others and get free access on the network when you are away from your access point. Interesting stuff. Let's discuss the possibilities.
There is no doubt the telcos want to control everything they can get their greedy little hands on. But let's not leave out the cable companies either. Years ago there was a funny and scary little quote going around in the telco community. It was back when the internet was just starting to boom. Maybe mid 90's. Some spokesman for the telcos, I forget his name, said: "We don't want to be ON the information superhighway... We want to be the TOLL BOOTHS on the information superhighway." And I don't think they'll ever stop trying to be just that. EDIT: Just to add to the point. Take a company like Google. They're huge and smart, but one of their main weaknesses is that they have to depend heavily on the infrastructure that already exists in order for people to use their product - their search engine. Goog obviously can't build their own phone and cable lines and run'em to your house. They have to rely on the phone and cable companies. Google also has to rely on our ISPs to do their job. The cable and telcos know all of this, and they're dying to put the squeeze on the big players (like google, MSN, etc) and milk some more cash out of'em. The telcos, if they can get the help of congress, can get a lot of big internet companies by the short hairs... Hence your point. WHY aren't more people, especially in our business, worried about this? I don't know. But it's gonna be one heck of a fight.
Google may not go it alone. However, think of this: Google partners up with Verizon, SBC or some other large ISP/Broadband carrier and introduces some sort of lower cost, completely net neutral service. It is a definite possibility. Just off of brand loyalty they will get hundreds of thousands of signups. Of course they will profit.