The announcement last Friday that Google has offered to deliver free Wi-Fi access throughout San Francisco no doubt sent shivers down a lot of corporate spines.

It isn't just that it's Google, the search engine giant already moving into VoIP and many other aspects of Internet-based commerce and communications. It isn't just that it's free--a price no one can beat. And it isn't just that it's ad-based--a model telcos, ISPs and others will be hard-pressed to duplicate.

It's all that taken together and garnished with a massive dose of uncertainty and a small dash of paranoia. Are Google, eBay, Yahoo! and others slowly but surely encroaching on the turf and more importantly the profit margins of the telecom industry?

Well, yeah, sure they are, but so what?

Did SBC, Verizon, Comcast or another big service provider leap at the chance to offer low-speed Wi-Fi service in a city that is a topographical nightmare for wireless signals? No, they didn't, because they can't see the profit in it. So Google is only doing what incumbents decline to do.

Google has the cash, however, to spend up to $20 million to put Wi-Fi hot spots at a promised density of 20 to 30 access points per square mile. The free service will be 300 kb/s.

Google may succeed in getting its ad revenue and satisfying whatever greater goal the company has [insert your greatest fear here]. It may also find, however, that it has bought into a sinkhole of customer service and constant upgrades.

At that speed, viewing ads during your searches could be painful. Many San Franciscans will be unwilling to surrender a high-speed service for which they pay $40 a month or less. Businesses are even less likely to count on Google Wi-Fi for their operations, given not only its relatively low speed but also potential security concerns. In fact, the Wi-Fi service may be used primarily for casual and outdoor use, and as the only affordable provider in low-income areas.

If this development has any impact on incumbents, it should be to get them to take seriously the many municipal network initiatives and to start looking at more productive and creative ways to work with cities and towns to get broadband where they obviously think it needs to be.

Rather than sit and wait to determine how the great Google experiment turns out, service providers need to have the courage to do a little experimenting of their own.

E-mail me at cwilson3@primediabusiness.com.