The economics of Google Fiber and what it means for U.S. broadband

Originally posted on Gigaom:

Google (s goog) launched its fiber-to-the-home gigabit network Thursday in Kansas City, KansasMo. and it wants everyone to know that this network isn’t a charity case. Several Google executives at the event were very clear that delivering gigabit internet access over fiber for $70 a month (and even free 5 Mbps fiber) is a business that will not only help advance Google’s consumer goals, but also make it money.

“There’s no sense selling a product at a loss,” said Google CFO Patrick Pichette (just look at Google’s Nexus 7 tablet). “But it’s not only about profits, it’s about changing the access costs.” His goal and Google’s goal is to bring the same efficiencies that have helped create cheaper, smaller and more powerful computers and create a cost and improvement curve for broadband access that resembles the curves for compute storage, as the chart below illustrates.

And Google may…

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