5 Reasons Why Google Won't Become a Phone Carrier
CNNMoney.com Dec. 30 offered a compelling piece arguing that Google could become a phone carrier that competes with Verizon, AT&T, Sprint, T-Mobile and others in the United States.
David Goldman argued that the search and Web services provider has established the Android operating system as a popular platform, has tried to sell unlocked phones online and is experimenting with providing ultra-high-speed broadband via Google Fiber.
Google Voice, the free phone management service, is the company's ace in the hole, Goldman believes. All of these efforts are geared to drive greater adoption of Google's search and Web services.
eWEEK can think of many reasons why Google wouldn't go there, but, assuming Google was willing to spend $20 billion or so of its $33 billion in cash building out the required infrastructure, here are five good ones as 2011 gets under way.
1) Incumbents Despise Competition
Competition among carriers is so cutthroat that the idea that Google might throw its hat into the carrier ring must feel like treason to Verizon, AT&T and other incumbents that have embraced Android on several smartphones. These carriers wouldn't take kindly to Google encroaching on their turf. MG Siegler at TechCrunch corners this competition well. Such a move could seriously chill carriers' adoption of Android.
2) Congress Calling
Silicon Alley Insider's Matt Rosoff underlined a key reason why Google won't become a carrier: Verizon and AT&T spent more than $7 million in the third quarter of 2010 lobbying the government. With that kind of political sway, it's highly unlikely folks on Capitol Hill will allow Google to proceed as a carrier. The powers that be would bring the full scourge of the Justice Department and Federal Trade Commission on Google for trying such an audacious move.
3) Public Trust
If Congress is on the fence, consumer privacy advocates such as the Consumer Watchdog will surely tip it toward the side of the carriers. Google's prospects as a phone carrier take on a dim light when one considers the company's trust level is at an all-time low following its WiSpy and Google Buzz privacy issues. Privacy peeps won't easily cotton to the notion of Google owning the broadband pipes and spectrum airwaves. These groups don't require proof to allege that Google will tap people's phone lines and conduct gross deep packet inspection if it is allowed to become a carrier. The cries of Google as Big Brother from 1984 will echo throughout the halls on Capitol Hill, fueled by the paranoia that Google has indeed grown too big for its britches.
People associate Google with search, and perhaps Gmail, in the United States and abroad. Adding carrier to the superlatives mantel is a tricky fine line to walk when Google hasn't even demonstrated the marketing savvy to effectively communicate and sell products such as its Nexus One smartphone or Google TV. How would it possibly appear on consumers' choice horizons as a carrier and then get them to buy in? We think this extremely unlikely.
5) Today's Choices Are Good Enough
Despite massive grousing by consumers when their calls get dropped from one city to the next, we don't need another carrier. The Big Four have the glut of America covered, with smaller providers such as U.S. Cellular filling in spots in the great Midwest. Unless Google provides something that is empirically proven to be faster and more robust and provides a cost savings to users over existing plans-anyone else tired of paying $70 to $200 a month for voice and data under current carrier rates?-the market won't bear it.
Google Ad Infinitum
Something to consider: Let's say Google worked out some deal with Verizon, AT&T and others to make them amenable to letting the company play in the carrier game. And let's say the government welcomed Google with open arms.
Would you want Google to be your wireless carrier? In short, would Google be crossing a psychological barrier of people picking Google to be the proprietor and manager of not only their search and Web services, but the broadband pipes and airwaves to deliver it?
If Google can do that, what is to stop it from creating its own media mecca, creating a Google TV network and playing against NBC, CBS, Fox and ABC? How far down the rabbit hole can we go with Google?
Something to mull as you start your 2011. Happy New Year.