I remember an article, way back, which claimed that YouTube was running at a loss, based on a dramatic over-estimation of its costs. This looks like the same thing again: unsupported assertion that Google's costs are going to be huge (because other telcos, which are very wasteful in ways that Google isn't, have huge costs).

I also think this article may be understating the upside, from Google's perspective. It looks like Google wants to displace cable companies not just as ISPs, but also as television distributors, replacing them with YouTube. That'd be worth a lot of money, and it's something they could reasonably achieve - but they need something like Google Fiber to put them in a good bargaining position with the content producers.