We're planning to build and test ultra high-speed broadband networks in a small number of trial locations across the United States. We'll deliver Internet speeds more than 100 times faster than what most Americans have access to today with 1 gigabit per second, fiber-to-the-home connections. We plan to offer service at a competitive price to at least 50,000 and potentially up to 500,000 people.
This is completely incredible and entirely unexpected (at least I think so). First a massive mobile play against Apple and the iPhone with Android and the Nexus One, then a direct assault on Facebook and Twitter with Google Buzz, and now... an offensive against Comcast, Time Warner and Verizon.
With 1Gbps of bandwidth, I expect a lot of people will try to start their own localized ISPs. I wonder if that's at all part of Google's strategy. If they were able to directly service 500,000 people, and even half of those people decided to start sharing their connection with friends and neighbors through WiFi, they'd have millions of subscribers by proxy. With a 1Gbps pipe you could supply an entire office building with high speed Internet. All you really need is a few 802.11n access points.
It seems to me like Google's real goal here isn't to spur innovation, but rather to see if they can increase the number of pageviews per person by providing us a better, faster Internet experience. The idea being that the quicker things loads the more content you'll be able to view in the same amount of time—and the more searches you'll be likely to make. If the Internet suddenly becomes faster for a whole lot more people, Google will be able to serve more ads per person per hour.