I'm pretty underwhelmed by the announcement.
I have an iPhone, I live in NYC, and my network is terrible. That's exactly the kind of problem markets are supposed to solve, right? I should ditch AT&T and go with a competitor.
The problem is that my phone cost $300, the Apple Care costs $70 (and you need it because the battery is sealed into the phone, and won't last 2 years), and there's a $175 early termination fee. So walking away is pretty expensive.
This Google phone will have essentially the same deal. You'll still be tied to a carrier, and it will be expensive to walk away. Maybe Verizon or T-Mobile will be a lot better than AT&T. Or maybe when many millions of people buy these data hungry phones in a short period of time, their networks will sink just like AT&T's has.
We need to commoditize wireless bandwidth. We want a universe in which we buy our phones directly, we own them, and we can choose which networks to plug them into. And if a network is bad, we have to be free to walk.
These walled gardens are always going to give us crummy throughput, unreliable service, and restrictions on the apps we can run. Just swapping one corporation (T-Mobile) for another (AT&T) isn't going to fix anything. Maybe they'll be marginally better. But without a real market operating, and the ability for us to move around in response to the quality of service we receive, we'll never get a good wireless network.