Most of what the telcos have going for them are barriers to entry and a nice duopoly.

The barriers they have to entry might be significant to you or me, but they are pretty trivial to Google, especially in the wired space. In the wireless space they still need to overcome the insane bidding for spectrum that the duopoly permits.

Google needs KC to prove that the $70 price for fibre is not 'below market', once they've rolled out a profitable fibre service @ $70 per month they can roll into markets full of regulatory capture and the FTC will be largely unable to say that they are using their search monopoly to undercut telcos.

If they don't offer phone service the telco is even more screwed as that's where most of the regulatory power is.