Beginning this fall, CityBridge will provide residents of New York City with free Wi-Fi. The project that involves support from a Google (NASDAQ:GOOG) (NASDAQ:GOOGL) endeavor known as Sidewalk Labs is likely to result in a lot of happy New Yorkers, but it could be just as beneficial to the search giant.
Sidewalk Labs, a company Google founded earlier this year to "improve life in cities for everyone through the application of technology to solve urban problems," is an investor in Intersection, a partner in CityBridge (alongside Qualcomm and Comark). CityBridge is leading LinkNYC, a plan to transform old, unused payphone booths into free Wi-Fi hot spots in the Big Apple. Sidewalk Labs hasn't disclosed its future targets, but has said it will look to bring its technology to other cities. In time, urban residents across the country -- and perhaps the world -- could come to depend on Google for their Internet needs.
S stands for Sidewalk?
Earlier this month, Google announced a plan to restructure, changing its name to Alphabet, and breaking out many of its increasingly exotic business units as separate companies. Sidewalk Labs is one such company, led by former Bloomberg CEO Dan Doctoroff. In an interview with his former firm, Doctoroff admitted that Sidewalk Labs would look to bring its technology to other cities over time, and that it could eventually go global.
Starting later this fall, CityBridge is slated to begin installing Wi-Fi pylons throughout New York City. These pylons will provide free Wi-Fi and phone charging and, through a network of advertising, could generate an estimated $500 million for the city government over the next 12 years. It's not the first time Google has provided such a service -- it provides free Wi-Fi in parts of Mountain View, Calif. (where its headquarters are) -- but it is a far more substantial undertaking.
LTE-U, Project Fi, and OnHub
Google is becoming increasingly interested in Wi-Fi, launching services to take advantage of it, and pushing regulators to protect it.
Project Fi, its wireless service, is designed to utilize Wi-Fi networks. Project Fi subscribers have their calls and text messages routed over available Wi-Fi connections whenever possible, switching to Sprint or T-Mobile's wireless network only when Wi-Fi isn't available. For many, that may be often, as free Wi-Fi networks are relatively scarce. As it stands, Project Fi is a limited service, accessible only to owners of Google's Nexus 6 and available only through an invite system. But if Google can -- through Sidewalk Labs -- expand free Wi-Fi availability, Project Fi could become more attractive and more reliable.
Verizon and T-Mobile plan to utilize Wi-Fi airwaves to broadcast cellular signals. This technology, known as LTE-U, has drawn the ire of Google. According to The Wall Street Journal, Google expressed its displeasure to the Federal Communications Commission in June. Google cited the potential for LTE-U to degrade Wi-Fi signals, weakening the potency of free Wi-Fi networks. In the letter, Google cited Wi-Fi hot spots provided by cable companies, but LTE-U may jeopardize its own ambitions.
Then there's OnHub, the $200 Wi-Fi router Google recently unveiled. OnHub is designed for consumer use -- meant to occupy a shelf in a home -- and seems unrelated to its urban Wi-Fi ambitions, but by providing a strong signal and an easy to use interface, Google is establishing a new standard in-home connectivity, and helping to ensure that people have fast, speedy Wi-Fi wherever they are.
More Wi-Fi, more searching
CityBridge will likely take some cut of the advertising revenue its Internet pylons generate, but the benefits to Google are likely to be far-reaching. In its annual filings, Google consistently cites threats to Internet access as one of its primary risk factors -- if consumers are unable to get online, they can't access Google's services. If urban residents have access to speedy, ubiquitous Wi-Fi networks, it seems likely that they'll spend more time with Google search, Gmail, and YouTube.
Google's other Alphabet companies (like Nest, Fiber, and Calico), have received a great deal more attention. Ultimately, however, Sidewalk Labs could be just as significant.
Editor's note: This article has been modified to more clearly state Google's Sidewalk Labs' role in the project to bring more Wi-Fi to New York City.
Sam Mattera has no position in any stocks mentioned. The Motley Fool owns and recommends Google (A shares), Google (C shares), and Qualcomm. The Motley Fool recommends Verizon Communications. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.