Why Does Google Want to Become an ISP?

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Feb. 27 (Bloomberg) -- Cory Johnson examines the reasons for Google's foray to become an Internet Service Provider. He speaks on Bloomberg Television's "Bloomberg Surveillance." (Source: Bloomberg)

The heavy lifting, highly regulated world of being an internet service provider?

This is an interesting business that place of the strengths of google, understanding networks and getting signals from one place to the next and using the bandwidth that they already have, going back and forth across the country.

It is actually very clever.

The speeds at which this service work's are so far and above what the other providers, like comcast and time warner cable are going to be able to provide.

This is a different order of business, offering the opportunity for google to be in those businesses and not take the wire carriers out.

Google is proud -- planning to expand the 34 more cities, there are cities who want to compete for the service.

How does google decide which cities it will do this in?

There are a lot of cities in america that have spent money at the end of the .com bubble to install fiber throughout their cities.

Provo is one such city.

I spoke to the mayor, talking about the impact of having this.

This is 100,000 times faster than the average download.

With that speed internet service, what that will do for the community here in provo.

We have no doubt that not only business but community involvement and health care, we are starting to see an excitement and a buzz in potential and what this could mean and what we could do, and obviously we have not been here long enough to have concrete results but based on the buzz this is good.

The experience in kansas city, the only place to have it so far is very dramatic.

They talk about people coming from all over the midwest open a businesses in kansas city because of the speed of the internet service.

They actually sided google fiber as one reason -- cited google fiber as one reason things in kansas city have gotten better.

This plays on something they already have and changes the business community to where they are going.

Thank you very much.

Cory johnson in provo, utah.

He is our correspondent and one of the stars of "bloomberg west." cities had to give up a lot, kansas city gave up many concessions.

Are they giving away too much to give away -- to get some future competitiveness?

In the previous segment you talk about infrastructure and the huge infrastructure need to spend in the united states.

This is just as important as roads and highways.

I would argue that this is more important in the world we are moving into.

Cities like kansas city decided it is worth it.

Rob, of harvard business

This text has been automatically generated. It may not be 100% accurate.

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