What is the key implication of Google Fiber selling 1-Gbps symmetrical access for $70 a month? Granted, such offers pose destabilizing and disruptive challenges to any ISPs competing in the markets where Google Fiber exists, or could exist. At the very least, Google Fiber will push other major ISPs to speed up the volume and tempo of their bandwidth upgrades.
But Google Fiber raises, in a new way, an older argument about the impact of Internet technology in a broad sense.
To be sure, Gates meant that bandwidth would not be a constraint to creating new services and apps, as computing cycles and storage had ceased to be a fundamental problem in the software business.
Nor, as it turns out, is it true that computing or information or content always “wants to be free.” But it still is worth considering “what would my business look like?” if communications, bandwidth, computing, storage or information were so available and low cost that those ceased to be constraints to a revenue model.
Such assumptions have immediate consequences for suppliers of those goods, of course. If communications, computing, storage or information wind up being so low in cost that they no longer constrain what can be done, what changes?
Google, Netflix, Amazon, Apple, Facebook, Square and many other examples illustrate what is possible when computing, communications, devices, transactions and information suddenly cease to be barriers.
“You can’t use today’s technology constraints to predict tomorrow’s developments,” says Amadeus Consulting CTO John Basso. That fundamental insight, based in large part on Moore’s Law, might once again be more important than often is believed.
You could argue whole businesses now are built on the assumption that technology (especially hardware) constraints disappear over time. All cloud-based apps are built on such assumptions.
In 2004, Gates argued that “10 years out, in terms of actual hardware costs you can almost think of hardware as being free — I’m not saying it will be absolutely free — but in terms of the power of the servers, the power of the network will not be a limiting factor,” Gates has argued.
You might argue that is a position Gates adopted recently. Others would argue that has been foundational in his thinking since Micro-soft was a tiny company based in Albuquerque, New Mexico in 1975.
Young Bill Gates reportedly asked himself what his business would look like if hardware were free, an astounding assumption at the time. In inflation-adjusted terms, an Apple II computer of 1977 would have cost $5,174, for example.
Though there are lots of entrepreneurs advocating or working on new ways to make bandwidth available to end users, both in consumer and business settings, Google Fiber arguably has the potential to radically remake expectations in the Internet access space, in part because of its high profile and assets. It sometimes might take a very well-heeled entity (such as Apple) to change or disrupt an industry, and Google is such a firm.
In the same way that Gates has argued that hardware will not be a limiting factor for what can be done with computing, you might argue that Google Fiber once again raises the same question for communications. Granted, $70 a month is not free. But $70 for a symmetrical gigabit access service, in a decade, might be the equivalent of “so affordable that access no longer is a constraint.”
That is what Google wants, and that is what Google Fiber seems to be encouraging, in a serious new way.
