Is Google planning to offer nationwide WiFi? Business 2.0 is running a story touching many of the highpoints of the idea, but analysts covering Google have been following the company’s move in this area for a number of months.

The large number of telecom and internet bankruptcies over the past five years has created thousands of miles of “dark” fiber-optic cable across the country. Google has been quietly buying up these high speed cables and super fast connections from other firms. At the same time, Google has been funding a project with Feeva, a startup, to provide free WiFi access in San Francisco’s Union Square shopping district. More recently, Feeva is rumored to be developing similar projects throughout California, Florida, New York, Washington and elsewhere, with an unnamed backer.

Numerous media outlets are touting Feeva’s proprietary technology that allows it to “pinpoint” a user’s exact location in real-time. While this is an interesting means for location determination, Feeva is not the only company capable of using WiFi for location “spotting”. Microsoft, Skyhook Wireless and others have proven the ability to use hotspots to triangulate user’s locations. Although, the area is still new, and the technology requires knowing the location of hotspots (open or closed) in an area.

With Google’s recent fiber-optic purchases/leases and the rollout of Feeva, Google does appear to positioning itself to offer WiFi to the masses, at least in major cities.

Will “GoogleNet” be free? That is the next question. Google does offer some services/software for a fee and has continually told analysts that standard sales/licensing processes remain a viable option. However, it is much more likely that a WiFi offering by Google will be paid for, at least in part, via advertising similar to the majority of its services. Consumers often view searches on Google/Yahoo or even basic television as free, but it is not. These services are paid for from advertisers. While consumers may not pay initially, the advertising budget supporting these services come from consumers purchases online, in stores or from service centers. The business model is simply different.

With Sprint Nextel owning 2.5 gigahertz coverage for 80% of the country, we may begin to see a race to push bandwidth well above the limits of the 3G networks being rolled out.