GoogleNet Inches Closer to Reality

First the rumor, then the Wi-Fi VPN, now confirmation of a bid to provide free Wi-Fi across the city of San Francisco (per Reuters):

"Google has submitted a proposal to offer free, wireless Internet access (Wi-Fi) to the entire city of San Francisco," Google said in a statement.

The Wi-Fi access could be funded through online advertising, a Google spokesman said.

Om Malik did the original reporting on the GoogleNet story and has some more information on his blog:

"Google officials say San Francisco residents (and visitors) will enjoy a free 300 kilobits per second, always on connection anywhere in the city. As part of its proposal, the company says it will be offering wholesale access to other service providers, who will offer higher throughput connections to their customers. Google says it plans to use its own authentication services."

At least "officially," this then becomes more of an infrastructure play than a pure competitive offering, although one has to see it as competitive with other service providers, which currently have built lucrative business models around access. (Why would I pay Comcast or SBC, for example, when I can get it for free? — unless there's something scary or obnoxious about the entire offering.)

More from Malik:

€œSan Francisco will be a true test bed for location based services and applications,€ says Chris Sacca, principal of new business development at Google. While the initial use of location-based services might be limited to more-focused and targeted advertising, the potential of location-based services is immense, officials said. Sacca pointed out that the network bid was in line with Google€™s thinking on delivering answers anytime anywhere to anyone, and looking beyond a desktop PC."

On to the familiar bulleted list of some of the implications (I've written others here):

• This shows that Google sees its growth depends to some degree on keeping broadband momentum going and wants to take that into its own hands
• Location-based ad targeting/services go without saying (but Google has a range of things in mind beyond more location accuracy)
• Potential revenues from wholesaling access to third parties
• If GoogleTalk ever develped a PC-to-Phone capability (it's PC-to-PC now), this would make Google effectively a telco (a la Skype)

Assuming this gets built out, it would be a lab for Google to test new products and services (as company spokespeople suggested). Clearly, if it worked, the effort would be to roll out the offering on a larger geographic scale (U.S. and beyond?).

If the company is going to try to do this with municipalities, there will be lots of bureaucratic headaches and legislative barriers thrown up by entrenched telco competitors (as has been the case in Philadelphia). But Nitin J. Shah, CEO of Feeva, which has been associated with the GoogleNet rumors (Shah will be speaking at ILM:05), told me that working with municipalities across the country would potentially be much more challenging than just trying to build a network privately. (Feeva has two hotspots in SF.)

Everyone will be watching this — it goes without saying.

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More from SiliconBeat and read Om Malik's full post.