Google has begun building its free high-speed network, which promises speeds of 1 gigabit per second for both downloads and uploads using fiber-optic lines to the home. “We believe the uplink capacity is the real game-changer here,” Lo said. “We’re going to light up our customers in the first half of next year.”

Today’s Internet connections typically enable much higher download speeds that upload speeds, a design that helps with applications such as watching streaming video off the Net but makes it harder for tasks such as uploading photos or holding videoconferences.

The project began in Kansas City, Kan., but expanded to the nearby Kansas City, Mo., shortly afterward. In an interview, Lo declined to state how many of the cities’ residents would receive the service, but said it’s designed so that it can reach all of them.

The show’s audience–many of them Internet service providers keenly interested in the fact that Google is pushing a free service into the heart of their business–tried with little success to extract financial details about Google‘s project. Lo wouldn’t comment on how much it costs to bring service to each household or on how fast it expects a return on its investment.

But he did say it will make Google money one way or another and that the company can afford to make expensive investments in infrastructure.

“This is a business for us. We expect to make money. We don’t expect to lose money,” he said. “Google is not a cash-starved entity… This thing has to make economic sense, and it does.”

The Google Fiber project began in 2009 as Google employees contemplated the U.S. government’s attempt to improve broadband. In a late 2009 discussion, co-founder Sergey Brin asked, “If we think this idea is so important, why are we waiting for the government to build it? Why aren’t we building it ourselves?” Google announced Google Fiber in 2010.

Google is “starting” Google Fiber in Kansas City, but it’s not clear to what extent it’ll go beyond that area. In the interview, Lo refused to offer any further details of its expansion plans.

Even though the company is confident the project makes business sense, it’s not clear on what exactly gigabit Internet will bring to households beyond some ideas such as videoconferencing.

“We have no idea why you need a gigabit today,” Lo said. “When we all had dialup connections 15 years ago, you could not have imagined watching video like you do today. It’s not about doing e-mail faster, it’s about doing those new things that you don’t do today.”

Google will pay $40 a share in cash for Motorola, a 63 percent premium over the company’s closing stock price on Friday. The acquisition will “mildly” add to earnings once the deal closes by year’s end or early 2012, Google said.

The deal simultaneously lends stability to and shakes up the Android world. With Motorola, Google gets a treasure trove of patents to defend itself and its partners against a rising tide of legal opposition. Over the past few months, major technology players such as Apple and Oracle have sued either Google or its partners in an attempt to slow down their competitors and extract licensing fees.

“We believe we’ll be in a very good position to protect the Android ecosystem for all of our partners,” David Drummond, Google’s chief legal officer, said today during a conference call. He declined to provide specifics on the company’s future legal strategy.

At the same time, the deal puts Google in the awkward position of competing against many of its partners. For the first time, Google will have a direct hand in the mobile business that it fostered from a distance. While Google creates the Android operating system critical to running millions of smartphones and tablets, it has yet to get into the design and manufacturing business itself, aside from a few experimental models with handset partners such as HTC and Samsung.

Google Chief Executive Larry Page said during the conference call that Motorola will be run as a separate unit and reiterated Google’s commitment to keeping Android open. He declined to get into specific dynamics of how Motorola will compete with other Android vendors such as Samsung, HTC, or LG Electronics.

Instead, Google focused quite a bit on the protection it will gain from the deal.

In the same vein, Motorola Chief Executive Sanjay Jha had talked up the strength of his company’s patent portfolio during its most recent quarterly conference call and suggested that he was willing to step into the legal fray as well. Motorola already has an outstanding dispute with Microsoft and Apple. Last month, billionaire activist investor Carl Icahn disclosed that he was pushing for Motorola to sell its patent portfolio because the need for intellectual property has reached at an all-time high.

On today’s call, Jha touted the company’s 17,000 patents and 7,500 pending patents. They include many non-essential patents that aren’t core to a phone’s operations but can be used to improve features such as voice quality. It’s unclear whether Android partners will get access to those patents, or whether Motorola’s patent portfolio will simply offer legal cover.

Motorola, along with HTC, has been a major early supporter of the Android operating system. Jha chose to scrap Motorola’s other projects and focus solely on Android, which paid off immensely when Verizon Wireless chose the original Droid to push as its flagship phone during the 2009 holiday-shopping season. AT&T more recently chose Motorola’s Atrix as a flagship phone. Motorola has also renewed its ties with Sprint Nextel. Last month, it reported better-than-expected second-quarter results and hinted at a strong fourth quarter.

But the company has struggled recently too. While the Atrix was heavily promoted by AT&T, it wasn’t a breakout hit. Motorola’s first tablet, the Xoom, failed to make a dent in the market, even after a price cut. The 4G capability for its Xoom is still unavailable despite hyping the feature at the Consumer Electronics Show in January. And the company’s long-delayed Droid Bionic for Verizon Wireless isn’t expected until next month.

Page, however, said that Motorola continues to have “tremendous opportunity for growth,” adding that he likes Jha’s vision for future products. Beyond smartphones and tablets, Motorola has a television set-top box business and has relationships with carriers and cable providers, an area where Google can push its connected-TV ambitions. Likewise, Jha said he sees the opportunity for more convergence between the set-top box and mobile devices.

“We’ll be able to deliver products that will delight customers,” Jha said.

Drummond said he expects that the deal will require regulatory approval and added that he is confident it will be approved.

“Android is clearly adding competition, innovation, and user choice,” he said. “Protecting that ecosystem is pro-competitive almost by definition.”

Google, meanwhile, will be attempting to maintain its neutral stance in Android land even after the deal.

“Our vision for Android is unchanged and Google remains firmly committed to Android as an open platform and a vibrant open source community,” Andy Rubin, senior vice president of mobile at Google, said today in a statement. “We will continue to work with all of our valued Android partners to develop and distribute innovative Android-powered devices.”

Rubin added on the call that the other major Android vendors showed “enthusiastic support” for the deal.

Google offered a Web page listing comments from other vendors.

“We welcome today’s news, which demonstrates Google’s deep commitment to defending Android, its partners, and the ecosystem,” J.K. Shin, head of Samsung’s mobile division, said on the page.

The new tablet, which is supposedly due out in October, will reportedly have a nine-inch screen. And it will run Google’s Android operating system, the Journal said, citing unnamed sources. Amazon isn’t designing the tablet itself. Instead, it will outsource the design of the device to an Asian manufacturer, the report said.

The Amazon tablet will reportedly be designed to allow Amazon customers to watch movies, listen to digital music, and read e-books, all of which are offered through the Amazon online store. The new tablet isn’t expected to have a camera, according to the Journal’s sources.

The article also said that Amazon is planning to announce two new black-and-white Kindle e-readers. The new e-readers will reportedly use the same faux paper and ink technology as the previous Kindles that makes the pages easy to read. One of the new Kindles will reportedly be a cheaper version of the existing Kindle. The company will also introduce a touch screen version of the product, which will compete against readers offered by Barnes & Noble and Kobo, the article said.

The new Amazon tablet will be entering a crowded field. Since Apple first launched the iPad a couple of years ago, the segment has been a hot category. And it’s quickly filled with competitors using the Google Android operating system. Hundreds of companies have entered the market, including big names like Samsung with its Galaxy Tab products. Others including Sony and Hewlett-Packard have also recently announced products in this category. Even mobile phone maker Research In Motion has tried to get into the market with the Playbook.

But so far, none of them has met the success of the Apple iPad.

The Journal article did not mention pricing for the new tablet or for the new Kindle e-readers.

The patent win comes at a time when Apple is ensnared in several patent-related battles with other companies.

Nokia sued Apple in October 2009 for allegedly infringing patents related to smartphones being able to run on GSM, Wi-Fi, and 3G networks. The claims also mentioned patents Nokia owned related to mobile device security and encryption.

Apple responded with a countersuit in December 2009, alleging that Nokia violated 13 of its own patents. However, Nokia announced last week that Apple had called it quits and the companies had agreed to a patent-licensing deal. A subsequent analyst report on the matter suggested Apple’s licensing costs to Nokia could reach $608 million.

But Nokia is just one of Apple’s problems.

In April, Samsung announced that it had filed a patent-infringement case against Apple in the U.S. District Court for the Northern District of California San Jose division, alleging that the iPhone maker violated 10 of its patents, including one that allows smartphone owners to use the Web while on a phone call. Apple alleged in its own lawsuit against Samsung in April that the company was violating patents on its user interface and mobile-device design.

The Cupertino, Calif.-based company upped the ante last week in an amended complaint, saying that Samsung has been heavily “copying” its own products.

“[Samsung's] products…blatantly imitate the appearance of Apple’s products to capitalize on Apple’s success,” Apple wrote in its complaint. “The copying has been widely observed in the industry and has been mentioned in multiple articles reviewing Samsung products.”

Exactly how Apple’s touch-screen patent will play into its current litigation remains to be seen. But as noted, it’s a far-reaching patent, and many portable-device makers have products that allow for multitouch gestures that control software on the display.

Apple has not immediately responded to request for comment on whether or not it will use the latest patent against competitors.

Source

Google, Apple, and Amazon are pushing more and more of your entertainment, your data — heck, your life — into the cloud. But what’s it mean for the wireless network operators who are already struggling to keep up with heavy data demand?

Each of these companies recently announced new digital storage services for music. The idea is that people can put their music in the “cloud,” which is really a remote data center. The “cloud” becomes the central repository for all of your music, pictures, and other data. And you simply connect to it via any broadband connection available to access it.

There are plenty of benefits to this, of course. For one, it’s incredibly convenient, especially when you’re connecting wirelessly. As Apple CEO Steve Jobs pointed out during his keynote earlier this week where the iiCloud service was announced, he said that it will eliminate the headache of syncing each device.

But using these services will no doubt eat up a lot more bandwidth than just downloading a song one time to your computer or smartphone. Once music moves to the cloud, you could be downloading that same song every time you sync your device or even every time you listen to it. And once Apple or Google start offering video in the cloud, the problem may get even worse.

Can wireless networks, which are already buckling under the load of simple mobile browsing, handle it?

That’s the big question.

“The tonnage of traffic on the network is growing,” said Fared Adib, vice president of product development for Sprint Nextel. “That’s an issue we [wireless service providers] are dealing with. And I think it’s too early to say how the cloud services will affect all of us. As an industry, the ecosystem needs to work together on these issues.”

Heavy data loads
Indeed, wireless carriers are already feeling the pain of consumers’ increasing appetite for wireless data. AT&T has become the poster-child for carriers struggling to keep up with heavy loads. AT&T, which used to be the exclusive carrier for the iPhone, has said publicly that the company’s data traffic on its network has increased 8,000 percent over the past four years.

AT&T Chief Executive Randall Stephenson said at the Telecommunications Industry Association 2011 conference last month that by 2015, AT&T will handle as much wireless data in a month and a half as it did in all of 2010.

Stephenson said the only way to accommodate that kind of growth is to add more spectrum to its network. In addition to asking the Federal Communications Commission to open up more spectrum, AT&T also plans to spend $39 billion to buy T-Mobile USA to get access to more spectrum in dense urban areas, like New York City.

Without T-Mobile’s spectrum, AT&T has said that consumers will not see improvements in dropped calls, faster speed networks, or improved access to “state-of-the-art mobile broadband Internet service.”

While AT&T may be the most vocal right now about its network capacity constraints, there is growing data to suggest that other wireless operators will also be challenged in the future. Network equipment maker Cisco Systems said recently in a report that worldwide data traffic in 2010 just on mobile devices was three times all global Internet traffic in 2000.

Internet traffic in general is expected to quadruple over the next four years. And by 2015, Cisco estimates that the amount of traffic traversing the Internet will reach 966 exabytes per year. Between 2014 and 2015 network traffic is expected to grow by 200 exabytes, more than the total amount of Internet traffic generated worldwide in 2010.

A large contributor to this growth is a surge in network-connected devices. This includes everything from smartphones to notebooks to tablets to home appliances. On average, a U.S. consumer will likely have seven connected devices by 2015.

And if Apple, Google, and Amazon have their way, many of these consumers will be using cloud-based services to share their content among their multiple devices.

Working together
While it appears that Google, Apple, and Amazon may be on a collision course with wireless carriers, it’s in everyone’s best interest for the two sides to work together. And it seems like they are.

“The sense we’ve gotten from working with Google is that they get it,” said Sprint’s Adib. “They know we have to balance the traffic loads with the service they’re trying to offer. And the truth is none of us want the consumer to have a bad experience.”

Indeed at the e-G8 Forum in Paris last month, Google Executive Chairman Eric Schmidt said wireless operators and content companies are “incredibly co-dependent.” He added that the two groups can work together to spread out data demand to ensure these networks aren’t overloaded.

Using Wi-Fi to offload heavy traffic loads is one solution. The cloud services that have already been introduced rely heavily on Wi-Fi networks to provide the network connection between devices and the “cloud.”

“Doing the bulk of uploads via Wi-Fi will help alleviate some of the network issues,” said Ross Rubin, an analyst with NPD Group.

Sprint’s Adib agreed. He said that nearly 80 percent of mobile data usage on its network is done by subscribers at home or in the office, where Wi-Fi is typically available. He said that the company is working on ways to make discovering and connecting to these networks easier so that devices do it automatically and seamlessly. For now the company doesn’t have anything to announce, but it’s working with its device partners to come up with better solutions.

But Adib said concerns about “cloud” services may be slightly overblown. While it’s true consumers may be downloading or syncing content more frequently from their digital “lockers” in the cloud, he doesn’t believe people will stream content constantly.

“These cloud service are about making sure that people get access to their content on multiple devices,” he said. “And that’s a good thing for carriers. We want people using more than one device.”

In the end, carriers benefit from these new services, and companies such as Apple and Google also depend on the increasing capacity and reliability of wireless networks.

“There is no question that Google and Apple would like to treat bandwidth as unlimited,” said Charles Golvin an analyst with Forrester Research. “But carriers increasingly aren’t able to provide that. But neither one wants to frustrate consumers. So they must figure out a way to work together.”