Yesterday's post regarding Google Fiber had the most telling quote in it:
»Ars Realizes Internet Can't Keep Up With Google Fiber
"You've in essence removed a bottleneck that the Internet isn't yet structured to deal with being removed. Having that much pipe means you're basically plugging your computer directly into the thing you're downloading from. Your own bandwidth is so great that it becomes immaterial. It becomes a question of how much bandwidth the other side has available."
In reality, Google has said very little regarding the service other than "we're going to deliver fiber-based services to a selected area". Anything else that's been mentioned regarding it has been speculation based upon analysis of how the project priced, delivered and performed.
That said, Google's pricing a service at a nearly negligible cost is doing two major things:
1) Putting billions of dollars behind the belief that the consumer's attention is worth more then the investment. Essentially, they're force feeding a HUGE spoon to the base they reach and showing advertisers, "look, if you want their attention...send it down my pipes and you'll make money."
2) They're upsetting the model that people buy "services" for the sake of having "services." Residential customers don't buy electricity for the purpose of saying, "look, I have electricity!" They purchase it to consume products that benefit from having electric access. By almost giving away the access needed consume tv and online products, Google is removing any reason customers may have for conducting even more of their lives outside of their infrastructure....or those companies also benefit from Google's business interests.
They're a complete mind-shift that entrenched providers are not ready to compete against.