Google is already an Internet service provider through its Google Fiber service, piping Gigabit Internet to homes and businesses in a handful of cities across the US. According to a report from The Information (paywall) the company has been considering supplementing Google Fiber's home Internet access with a wireless cellular service. Google's plan isn't to build towers, but rather to become a Mobile Virtual Network Operator (MVNO)—basically a middle man who buys service from one of the "big four" carriers at wholesale prices and resells it to consumers under its own brand. According to the report, Google spoke to Sprint and then Verizon about reselling their networks to customers, with the Verizon talks happening earlier this year. The service would be available to users in Google Fiber cities, and it would be supplemented with free Wi-Fi hotspots.

What would Google hope to accomplish with a move like this? Google built Google Fiber from the ground up by putting fiber on poles, running connections to each house, and providing self-built hardware. Complete control over every part of the network allows Google to differentiate Google Fiber in several areas, including service location, speed, and pricing. Google's plan for its wireless service appears to be much less ambitious, though. As an MVNO, Google would be using someone else's network, so the only thing the company would really have control over is the resale price.

One of the main points of Google Fiber is to "shame" other ISPs into increasing their speeds and lowering their prices. Google doesn't plan to cover the entire country in fiber, but one look at Google's 1,000Mbps service for $70 and the traditional ISP plan of 5 to 15Mbps for about the same price looks like a huge ripoff. This "halo effect" puts pressure on ISPs to speed up their service, and that makes Google products like search and YouTube run faster. The strategy seems to be working, with companies like AT&T rolling out fiber in response. As an MVNO, Google couldn't do anything like the Google Fiber strategy since it wouldn't be running the network. It wouldn't have control over speed or reception, meaning the best it could do to stand out would be to resell the service very cheaply. Unfairly competing with wireless carriers by pricing to only break even doesn't seem like it would put much pressure on other carriers, because they would realize Google would not be trying to turn a profit.

The only logical route we see would be for Google to use the licensed network as a stepping stone to building out its own network of towers, perhaps supplementing the licensed service with its own slow rollout. This would explain the reported decision to offer the wireless service in Google Fiber cities, where Google already has the fiber backbone needed to create a wireless network. Once you have all the fiber laid out, it's an easy jump to say, "Hey, wouldn't it be cool if we put up a cell tower?" With its own towers, Google would be in full control of its wireless service and could turn it into a "Google Fiber in the sky," which would put the same pricing and speed pressure on wireless carriers that Google Fiber puts on its land-based counterparts.

Google becoming an MVNO would no doubt make the bigger carriers wary of the company the same way Samsung and HTC worried about Motorola, which Google recently sold. If Google did something that angered the wireless carriers, they could take it out on Android devices and focus on pushing iOS and Windows Phone devices.

Google already sells unlocked smartphones directly to consumers through the Play Store, which could in itself be seen as a threat to carriers. The sales model of picking a phone first and a carrier second reduces companies like Verizon and AT&T to merely dumb pipes.

And as a mobile service provider, there would be obvious synergy with Google's device sales. Google could sell customers a Nexus device and a wireless plan and could even subsidize the devices. From there, it wouldn't be hard to imagine a small Google Wireless store in a mall, similar to what many other MVNOs have. All the devices currently sold in the Play Store are GSM, though, so it's strange to hear that Google only spoke to CDMA carriers, for which the company has zero devices.

Google may be willing to go to war with the landline ISPs because it knows it's in a strong enough position that it doesn't need the love and support of those companies. Landline ISPs don't have the power or influence to stop people from performing a Google search or from watching YouTube. However, wireless carriers are still the device gatekeepers in the United States, and angering them is a much more dangerous game. We'll just have to wait and see if Google really does want to take a swing.