Why would Google do this?   What do they have to gain?   Because controlling the distribution network (the means of getting content to you or having you physically access the Internet) may end up being a cost game more than anything else.   Surely, Google’s being able to use their almost unparalleled ability to target advertising to users will be improved by controlling the network. But, when companies like AT&T, who now own most of the on/off ramps to the network start setting up toll booths to get on or direct traffic (see article AT&T Sets up Internet Toll Booths here) then perhaps Google’s other reason is simply cost.  Why pay or be beholden to a toll booth operator to run traffic on their monopoly when you can build your own road and control it and your costs yourself. 

This may end up being one of the new AT&T’s biggest blunders.  Certainly, they own the pipes and can do what they will with them, but, but charging rather than partnering (and with excess dark fiber still out there and enabling technologies coming online such as WiFi and WiMAX) AT&T may inadvertently be pushing greater competition against themselves, rather than drawing them to themselves.  The end result?  It gives users such as you and I more choice, and lower costs.   It costs AT&T business, possibly subverting their network hold and causing long term losses in the long term.  Is this the kind of thing we can expect from the resurgance of Ma Bell?  If so, I think the Web/Tech world will be rife with innovative new approaches to getting on and off the net to skirt AT&T’s potential for too much control.