April 22, 2015 Last Updated 7:50 am

Google unveils Project Fi, the company’s own wireless service

The service promises to improve connectivity, while only charging customer for the data they use each month at $10 per GB of data

The big news today, if you haven’t heard, is that Google is going into the telecom business. Well, sort of.

In reality, Google already is a telecom in that they offer some broadband services, but only on a limited basis. Now they are introducing data plans under the brand name Project Fi (also on a limited basis).

2015-04-22 14_21_09The idea is that cell phone users travel, and as they move from place to place they enter different networks: WiFi, LTE, 3G, etc. Google’s idea is that to provide the best service possible, these networks should themselves be networked so that the user always has the best connection. So far, so good.

But Google wants to be your carrier, so they are creating a new data plan where the user pays only for the data they use.

Nick Fox, VP of Communications Products explains: “Here’s how it works: for $20 a month you get all the basics (talk, text, Wi-Fi tethering, and international coverage in 120+ countries), and then it’s a flat $10 per GB for cellular data while in the U.S. and abroad. 1GB is $10/month, 2GB is $20/month, 3GB is $30/month, and so on. Since it’s hard to predict your data usage, you’ll get credit for the full value of your unused data. Let’s say you go with 3GB for $30 and only use 1.4GB one month. You’ll get $16 back, so you only pay for what you use.”

If you were following that, it can be summarized as $20 for service, plus $10 per gig of data.

For those who are immediately attracted to the idea, there is a huge catch: Project Fi is exclusive for now to the Nexus 6, and requires a special SIM card.

Variable rate plans always sound attractive when rates (or data usage) are low. You can, for instance, refinance your home mortgage today for around 3.6 percent. But an adjustable rate can be had for around 2.85 percent. But how good will that rate look a year from now when rates are going up?

Likewise, if you think you only will use 1GB of data in a month this sounds great… Just don’t watch any video on a network connection, and tell your boss to not attach that presentation to the email as it might just cost you a few bucks.

While I am skeptical about the way this will work, I am not at all surprised that Google is going in this direction. Working with the major carriers can’t be boatloads of fun.

Apple, if you recall, launched the iPhone exclusively with AT&T. But it was with AT&T only because AT&T bought Cingular, the company Apple actually did the deal with – and they only did the deal with Cingular because everyone balked at Apple’s demand that the carriers not junk up their beautiful new smartphone with apps no one wanted. Only when the iPhone proved a hit did Verizon and others want in, and were willing to bend to Apple’s will.

It should be surprising, then, that the two carriers who are partnering with Google on Project Fi are Sprint and T-Mobile – not AT&T and Verizon, who will look at Google as potential serious competition.

We’re entering new territory here, folks. Things are likely to get very interesting.

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