According to Om Malik of Business 2.0, Google may be quietly gathering up orphaned fiber-optic cables across America as a precursor to a Google WiFi service. If what he says is true, a free nationwide broadband network could save consumers and Google some money while putting serious heat on other telecom companies.

“Business 2.0 has learned from telecom insiders that Google is already building such a network, though ostensibly for many reasons. For the past year, it has quietly been shopping for miles and miles of dark,’ or unused, fiber-optic cable across the country from wholesalers such as New York’s AboveNet. It’s also acquiring superfast connections from Cogent Communications and WilTel, among others, between East Coast cities including Atlanta, Miami, and New York.”

A move to build its own network, would save Google millions of dollars a month paid out to ISPs who charge the search company as much as $60 per megabit in IP transit fees. As people download video and audio and other Internet offerings requiring higher bandwidths, the costs for Google will continue to rise. Providing its own nationwide ISP would be a good investment.

Further, Google has already sponsored a WiFi hotspot in San Francisco, and is reportedly dealing with a company named Feeva to provide access in other cities. Feeva has developed proprietary technology to determine user locations and funnel ads their way,

The obvious next question is: what happens if Google sets up a free ad-sponsored WiFi broadband network? Will this drive the current ISPs out of business? Will this be considered unfair competition, a Googlopoly?

Personally, I welcome the effort, as long as such developments don’t create a service monopoly that eventually has no incentive to provide a free service. Perhaps, as has been the case in other search engine ventures, we’ll have a choice between Google, Yahoo, and MSN ad-supported ISPs. Or is this a dream?