Google Fiber has so far only been an experiment. I see it as a very expensive, very ambitious proof of concept the likes of which only Google is capable of creating. This new announcement is evidence that their experiment of the last 4 years has succeeded.
Google can only move so fast with this given the stranglehold Comcast has on the market right now and the regulatory obstacles. There is a killing to be made by undercutting the monopolistic pricing and terrible service Comcast provides right now (not to mention the ways ownership of distribution might benefit Google's content).
TL;DR This is the next step in Google's big, slow play to become a major ISP.
I think it's likely that this exists mostly as a threat to keep the big ISPs from getting complacent. If internet speeds improve via themselves or the ISPs, Google wins either way as internet usage increases.
Google can only move so fast with this given the stranglehold Comcast has on the market right now and the regulatory obstacles. There is a killing to be made by undercutting the monopolistic pricing and terrible service Comcast provides right now (not to mention the ways ownership of distribution might benefit Google's content).
TL;DR This is the next step in Google's big, slow play to become a major ISP.