Of Google's many over-the-top innovations, including driverless cars, Project Loon, and the recently shelved Glass initiative, perhaps its most intriguing solution is its lightning fast Internet service Fiber. An Internet connectivity alternative, even at speeds 100 times today's U.S. average, may not have the pizzazz of Google's smart homes or futuristic glasses, but Fiber offers other, more tangible opportunities for investors.
There are a couple of reasons why cities around the country have been tripping over themselves to be next in line for Fiber: the aforementioned connection speeds is certainly one of them. But just as critically for consumers, Fiber is less expensive than existing cable alternatives that offer similar connectivity speeds -- and who wouldn't enjoy kicking their cable company to the curb? Turns out Internet users may have that as an option sooner rather than later, thanks to the Federal Communications Commission (FCC).
Bring on net neutralityAfter endless wrangling between the FCC and existing cable and telecom giants like Comcast and AT&T , Chairman Tom Wheeler announced the good news: net neutrality is here. Or, to be more precise, it will be the industry mandate by this summer. In a nutshell, net neutrality will deny cable and telecom providers the ability to selectively alter Internet connectivity speeds to their users. That seems like a no-brainer, but that hasn't been the case for several years.
The squabble between Netflix and Comcast is an ideal example of the willingness of connectivity providers to discriminate among content providers. Last year, Netflix customers complained about sluggish connections while streaming their favorite movies and shows. The problem? Comcast had essentially "squeezed" Netflix customers' connectivity speeds. The solution was not surprising: Netflix had to cough up extra fees to get Comcast to open its gates, which it has since done. AT&T also hijacked Netflix customers the same way. Not for much longer.
What it means for FiberGoogle has already experienced the lack of net neutrality, with Internet providers toying with the connectivity of its popular YouTube property. Thankfully for users, that will soon become a thing of the past. But the real bright spot for Google is the impact on its ability to roll Fiber out to the masses.
It was just a couple of months ago that Google sent a letter to the FCC in support of net neutrality. By recognizing Fiber in the same classification as Comcast and AT&T, Google will have access to existing infrastructure like telephone poles, conduits, and rights of way. As it stands, installing Fiber requires tearing up streets and property to lay pipes, which hasn't gone over well with many homeowners. And the lack of efficiency and costs associated with installing Fiber has played a key role in its slow roll-out.
But with the advent of net neutrality, Fiber will soon enjoy the same benefits as the Comcasts and AT&Ts of the world; bringing down costs, the lengthy installation process, and quite possibly mitigating the need for city governments to jump through existing Google Fiber hoops. As former FCC Chairman Reed Hundt put it, "If Title II (net neutrality) gives Google pole access, then it might really rock the world with broadband access."
But wait, there's moreIn case telecoms like AT&T weren't already on Fiber alert, the long-rumored introduction of a Google wireless network in the U.S. is coming to fruition. Google's own wireless network, along with the launch of its solar-powered drones beaming Internet connectivity to the under-served regions of the world, are both expected"in the next few months."
In addition to revenues generated from access fees, a Google wireless service also gives it an ideal platform to push its mobile ads out to even more consumers, just as Fiber does. For Internet and wireless consumers, Google will soon be in a position to offer legitimate alternatives to the relatively few existing players. And based on cable and telecoms' consistently poor customer service ratings -- year in, and year out -- there are a lot of folks who will enjoy telling their existing provider "bye-bye."
Not surprisingly, Comcast and AT&T have already said that when net neutrality kicks in later this year, the lawsuits challenging the FCC's ruling won't be far behind. If that reeks of an industry used to treating the Internet as its own private plaything, it's because in the past it has. But Google Fiber, along with its new wireless service, may finally change the status quo -- with consumers and investors reaping the benefits.
The article The Door to Google Fiber Just Flew Wide Open originally appeared on Fool.com.
Tim Brugger has no position in any stocks mentioned. The Motley Fool recommends Google (A shares), Google (C shares), and Netflix. The Motley Fool owns shares of Google (A shares), Google (C shares), and Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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