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Is Google Taking on the Telcos?

Daily Ticker

Google (GOOG) first transformed how people use the Internet.

The tech giant has already started revolutionizing the auto industry with its “driverless” cars. The company's "Google Glass" (computerized, high-tech glasses that allow the wearer to take photos, use voice commands to send instant messages and video chat with friends, among other functions) project is altering how individuals communicate with one another.

Now the Mountain View, Calif. company may have its sights on revamping America’s wireless network.

Related: Google Will Face Greater Competition in 2013: The Economist's Daniel Franklin

Google quietly submitted an application to the Federal Communications Commission last week for permission to build an “experimental radio service.” According to BTIG analyst Walter Piecyk, Google’s interest in a wireless license might mean the company has plans to construct a 50-site test wireless network at its headquarters. Google has requested to use the wireless frequencies controlled by broadband provider Clearwire.

Google’s move into the wireless space makes sense, says Piecyk. As more people have access to high-speed Internet, more online advertisements will be seen and clicked, meaning more revenue for companies like Google. Internet users will get a sneak peak of “Google Fiber” – Google’s broadband answer to existing Internet services -- later this year once Google engineers finish installing the fiber in Kansas City, Kan. and Kansas City, Mo., homes and buildings. Google says its broadband service runs 100 times faster than its competitors and boasts unlimited, high-speed data: “instant downloads” and “crystal clear high definition TV,” according to the Google Fiber site.

Piecyk says he believes Google would expand its ultra-fast Internet service to other U.S. cities after the two-city trial. Even though the company has remained mum on its wireless intentions, Piecyk points out that Google CFO Patrick Pichette confirmed that Google Fiber is “not a hobby” during the company’s earnings call with analysts this week.

Related: Why Your Phone, Cable & Internet Bills Cost So Much

“We really think that we should be making good business with this opportunity, and we are going to continue to look at the possibility of expanding, but right now we just got to nail — because we are in the early days — we just got to nail Kansas City,” Pichette said. “It’s a perfect place for us to kind of debug all of the elements of the product and the experience for the users.”

If Google chooses to officially compete with existing wireless providers, the consumer will likely win, Piecyk says. Dominant wireless carriers are ending unlimited data and moving toward metered data plans.

“To have a guy like Google keep other operators honest and invest money to get faster speeds in this country is a great thing,” Piecyk adds. “We should definitely be happy Google is doing what it’s doing in Kansas City.”

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