I fall into the second camp for a variety of reasons, all of which have been brought to the fore by the revelation that Google is paying France Telecom-Orange to deliver its data to users. It’s not clear how much Google is paying Orange, or what the precise terms of the deal entail (I’ve asked both parties for clarity), but it does look like a line has been crossed. Here’s why that’s bad.

Google is rewarding greed

Telcos are very fond of complaining about the cost of building out modern mobile networks that can support the explosion in data traffic — despite the fact that mobile broadband usage is the carriers’ current cash cow. A group of European operators even tried (and failed) to get net neutrality banned globally, so that they could try getting content providers to pay for having their traffic reach the consumer in a usable state.

But this is not necessary. The carriers already make money off delivering data, and they make it from the consumer who signs up for a data tariff or pays by the megabyte. The content providers, meanwhile, already pay on their end to deliver that data – through their own internet service provider and/or through a content delivery network such as Akamai, and also through investing in private delivery networks.

If the receiving ISP wants more money on top of that, you’d think that they would provide extra value in turn. That’s not what’s happening here. So Google generates half the traffic on Orange’s network? That helps drive and develop Orange’s business, so it’s not something that should be penalized.

Google is abandoning its principles

Let me briefly pass the mic to one Eric Schmidt, who said back in 2006:

“Today the internet is an information highway where anybody — no matter how large or small, how traditional or unconventional — has equal access. But the phone and cable monopolies, who control almost all internet access, want the power to choose who gets access to high-speed lanes and whose content gets seen first and fastest. They want to build a two-tiered system and block the on-ramps for those who can’t pay.”

Those were the days. Fast forward six-and-a-half years and Google finds itself in a somewhat different position. The main agent of that shift is Android, which makes the company both a content and platform provider in a hugely competitive market.

The biggest gains to be made there lie in emerging territories such as Africa, where people are currently abandoning feature-phones for low-cost smartphones. When he revealed the hitherto secret Google deal this week, Orange CEO Stephane Richard was clear that his carrier’s strong position in Africa gave it the leverage it needed to extract cash from the U.S. firm. In other words, Google stuck by its principles until self-interest dictated otherwise, and in the process…

Google is messing things up for other content providers

As Schmidt’s words from 2006 make clear, one of the key attractions of net neutrality is the fact that both large and small players get equal access to the information highway. As he went on to say in that screed: “creativity, innovation and a free and open marketplace are all at stake in this fight”.

This is really all about barriers to entry. If Google is paying a carrier such as Orange to handle its traffic better than it might otherwise be handled, then Orange has the incentive to demand the same from other content providers. Even if it does not, we hit the problem of telecoms network capacity being a zero-sum game – if it weren’t, Orange wouldn’t have any leverage here, short of blocking Google outright.

In other words, Google has not only set a terrible precedent for up-and-coming mobile innovators, but it has also made it more likely that the quality of new services will be degraded over Orange’s networks — all so that the quality of Google’s services can be maintained.

It’s probably not a deliberate tactic on Google’s part to disadvantage potential rivals, but it could sure work out that way. And for that alone, Google should hang its head in shame.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Growing Mobile Data Use Turned Up Heat on Carriers in Q3
• How to deliver the next-generation web experience
• Analyzing the wearable computing market

The network is being built by the New America Foundation’s Open Technology Institute (OTI), which has completed the first phase of construction of this network in the Cass Corridor section of Detroit. It plans to publicly release Commotion in early 2013 so other places can experiment with the technology. We’ve covered Commotion and the OIT’s efforts before in our story detailing the technology stack for an open wireless network. The stack contains technologies such as Serval, which would enable the handsets to recognize the Commotion network, Tor, a program that can hide where a user is coming from and OpenBTS, an open source base station that runs software that can interface between VoIP networks and GSM radios.

The idea of an open source wireless network, free from ISP and government meddling has been a dream of the Open Technology Institute for a while. In 2011 the nonprofit applied for a grant from the state department grant to make it happen using a cluster of technologies that have also been tested in unlikely places — such as this year’s Defcon security event. The State Department is keen to use such technology to ensure places like Egypt or Syria could still connect to each other and maybe the outside world, even if the government cuts off access to the web.

The upcoming public release of Commotion follows a funding round for a company called Open Garden, which is pursuing a similar mesh network creation software. Meanwhile Range Networks has formed to support the OpenBTS standard and deliver a “network in a box” that runs the OpenBTS software and allows users to make voice calls anywhere in the world.

These technologies are not going to eliminate your wireless phone bills or anything, but they can provide a testing ground for wireless engineering as well as a means by which communications can occur in areas where there is no Internet access. The OTI release on the news notes that more than half of Detroit residents do not have Internet service at home due to the cost of service and a lack of investment in infrastructure by Internet service corporations. With the Commotion network they can at least talk to each other — and the few who have Internet access might be able to offer that connection to the outside web via the software.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• Podcast: Mobile winners and losers in 2012 and what to expect in 2013
• Analyzing the wearable computing market
• LTE-Advanced: what it is and isn’t

If it sounds like Chicago is angling to be the next candidate for Google Fiber, then you’re probably not too far off base. At a press conference on Monday, Emanuel revealed that Google Chairman Eric Schmidt was the inspiration for the idea. Chicago is in the process of overhauling its century-old water distribution system, and Schmidt suggested that Chicago take advantage of the fact it’s digging up the city to lay new data as well as water pipes, Emanuel said.

According to Crain’s Chicago Business, the city is also willing to offer up access to other urban bric-a-brac that make up Chicago’s municipal infrastructure, from utility and light poles to dark fiber already strung under the Chicago Transit’s authorities elevated rails and within its subway tunnels.

There are a lot of cities vying for Google’s attention in case it chooses to expand its fiber project, and Emanuel isn’t betting the farm Chicago will be its next benefactor. He didn’t mention Google Fiber specifically in his speech, and instead announced that Chicago would issue a request for proposal asking any interested company, local university or other organization to submit ideas for implementing all or parts of the broadband rollout. Emanuel said he anticipates members of Chicago’s growing startup and entrepreneurial community would play a key role in contributing ideas.

Chicago’s Merchandise Mart, new home of Motorola

The goal of the project is to build gigabit last-mile fiber infrastructure in 15 “innovation zones” located in commercial and industrial corridors throughout the city. A second aim of that fiber build-out is to bring cheap broadband access to underserved and disadvantaged neighborhoods in the city – of which Chicago has plenty – and develop training programs to teach residents in those areas the “digital skills” necessary to put that access to use.

Finally, Chicago plans to launch a network of free Wi-Fi hotspots throughout city parks, plazas and other public spaces. The first of these networks went live this month in Chicago’s touristy Millennium Park. Though this component may seem like the least ambitious of Emanuel’s plan, it may well be the most controversial. During the first internet boom, Emanuel’s mayoral predecessor Richard M. Daley proposed an ambitious plan to blanket the entire city in Wi-Fi, but after several false starts the project was killed in 2007.

Chicago isn’t exactly starving for broadband either. Because of its central role in commodities and futures exchange markets (Where did you think pork bellies were traded?) Chicago’s downtown business core has some of the fastest internet access in the world, which the new River North tech community is tapping into. But Emanuel’s aim is to convert industrial zones lining Chicago’s miasma of waterways and railroad tracks — once devoted to slaughtering livestock, packing meat and manufacturing cocktail weenies – into high-tech zones. Also, the educational institutions around which tech communities like to congregate are well outside of the downtown core.

Chicago skyline image courtesy of Flickr user Bert Kaufmann; Merchandise Mart image courtesy of Flickr user HarshLight

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• CES 2012: a recap and analysis
• 12 tech leaders’ resolutions for 2012
• Connected world: the consumer technology revolution

Sarandos was referring to the low broadband caps in place at Canadian ISPs like Bell and Shaw, which force their customers to pay more if they exceed monthly caps that can start at just 15 GB. Netflix has sharply criticized broadband pricing in Canada before, with CEO Reed Hastings calling caps and overage fees like these “grossly overpriced.”

However, Hastings had initially said that he didn’t anticipate the caps to be a problem for Netflix’s business in Canada. The company eventually adjusted its streaming rates in the country, making non-HD streams the default option for Canadian users, and now it looks like it’s acknowledging that the caps are having an impact on subscriber growth.

Asked about it on Thursday, Sarandos had to concede that business in Canada could be better if broadband access came without caps and expensive overage fees. Said Sarandos: “The problem in Canada is… they have almost third-world access to the internet.”

To learn more about the future of TV, check out my ebook Cut the Cord: All You Need to Know to Drop Cable.

Image courtesy of Flickr user LWY.

And much like the welfare-to-work reform bill had such bipartisan support because it moved people from welfare into a job, the FCC needs to reform the Lifeline program so it moves people from government assistance into jobs. Not just any jobs, but tech-oriented jobs.

How might taxpayers respond if reform meant more than putting a modern digital face on an old-time subsidy, and put the same billion dollars a year to work producing thousands of 21st century digital workers?  These two stories illustrate the potential if we can get industry and government to “Think Different” about what Lifeline should be.

George Jefferson vs. George Jetson

The Lifeline program (for which everyone who pays a phone bill supports) currently provides $10/month to low-income people to get basic phone service. The FCC wants that $10 investment to eventually lead to broadband access for recipients. The challenge here is that the agency wants a program developed in the age of George Jefferson reformed for the age of George Jetson.

Lifeline started in 1984. It covered the cost of one telephone line for a family, one or two phones and local phone calls. The FCC paid an eligible telecommunications carrier (ETC) for each family that qualified. Lifeline served, and continues to serve, its purpose by enabling hundreds of thousands of families in urban and rural areas to get service they otherwise could not afford.

Lifeline now distributes about $1.3 billion a year nationwide. This year, the FCC commissioners, to their enormous credit, have decided it’s time to change the rules to support broadband adoption.

FCC Chairman Genachowski’s speeches on the subject are uplifting. They allude to futuristic technological benefits some might associate with the George Jetson-era. But intent and reality seem worlds apart if those involved with this program view this reform through the standard “subsidy for the poor” lens.

The FCC’s Notice of Proposed Rulemaking (NPRM) is somewhat underwhelming in regards to how reform will affect broadband adoption. The majority of the NPRM’s focus (see summary) is on ways to eliminate fraud and waste, which seems fine for making a program more efficient at distributing subsidies. But it could be more.

When the whole is greater than the sum of the subsidies

An earlier GigaOM article describes how the Long Beach YMCA Youth Institute annually provides 2,500 low-income high school, middle school and elementary school kids with training that builds business-level proficiency in a range of digital media skills. Students in the broadband-driven program become technology instructors, print publication editors and producers of original movies and music while in school, paid interns upon leaving school and for some, managers and staff at the Institute. The Institute has even spun off a nonprofit company that generates $400,000 annually providing digital media consulting services to clients around the country.

Handing individuals a $10 month stipend by itself, even for Internet access, won’t provide the type of personal economic development the Youth Institute delivers. However, if the Lifeline program were transformed to a broadband-to-work program (which is more than just digital literacy training), here’s how things might change.

A community organization develops a comprehensive plan for digital literacy, job skills development, internships, job placement and entrepreneurship that costs $500,000, for example. Maybe $300,000 could come from grants and foundations. Another $100,000 could come from the FCC’s eRate program for broadband infrastructure since the rules were changed to allow communities to access that infrastructure during after-school hours. And $100,000 could come from Lifeline, not as individual subsidies paid to a telco carrier, but as a grant to a local organization that selects a carrier (or endures the process to become an ETC) to serve low-income constituents who qualify for Lifeline. FCC Commissioner Clyburn responds to this and related ideas on the radio show Gigabit Nation.

By expanding the vision, modifying rules and adding requirements for participants to get jobs or become entrepreneurs, Lifeline becomes a catalyst to promote recipients to captains of their financial destiny. Would taxpayers prefer to spend $1.3 billion every year to have people be financially no better off in 10 years than they are today? Or use that money to make an earnest effort to transform potentially thousands of citizens into a digital workforce?

If the FCC is going to spend $25 million for pilot programs to test moving Lifeline into the broadband era, they and policymakers in general should expand their worldview. Communities need to be driving theses programs and policies. Programs such as the Youth Institute come from leaders in the communities and are facilitated rather than dictated by corporate and government sources.

We’re seeing little interest in putting communities in the driver’s seat of Lifeline reform but rather the continued reliance mainly on big carriers that are the bulk of ETCs. Sure, communities are asked for input from the passenger seats, but the steering wheel seems firmly planted in the hands of corporate entities that will always put stockholder interests above local communities and businesses. Programs such as Comcast’s Internet Essentials are still subsidy programs, just weighted ultimately in the best interests of the corporations. Will communities be allowed key roles in these Lifeline pilot projects? More importantly, will communities step up and demand that role?

Craig Settles is an industry analyst, consultant and host of the Gigabit Nation radio talk show.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• LTE-Advanced: what it is and isn’t
• The future of Wi-Fi in the enterprise
• Report: Monetizing Digital Content

Their success faces two challenges: a lack of sufficient broadband infrastructure in some low-income areas and broadband adoption efforts that miss the mark because policymakers don’t understand what leads to success. Fortunately, these issues can be addressed. Once we accept that success depends on how we spend that stimulus funding and what stakeholders expect (hope) to achieve.

A recent Forbes article illustrates the challenge we have when well-intentioned people don’t fully understand a particular market or that market’s broadband needs. Back in December, Forbes’ columnist Gene Marks told the world how he’d handle life and technology “If I Was a Poor Black Kid.” Quite a national backlash erupted.

Forgetting for a minute the tone of the piece (which was grating not just to those of us from the ‘hood), blood pressures spiked too because Marks assumed several things about a poor urban kid’s access to technology that are not true. If policymakers and others in positions of influence who read Forbes carry similar assumptions, good luck trying to bridge that divide. Poor kids of every color will lose out.

Better infrastructure is Job 1

Too many folks take as gospel that a good marketing campaign will increase broadband adoption in low-income communities. Use just the right spin, price point or magazine column, and poor folks will flock to the digital promise land.

An in-depth qualitative survey report commissioned by the FCC and released in 2010 by the Social Science Research Council reveals that lack of relevancy is not an issue, “even among respondents with profound histories of marginalization. No one needed to be convinced of the importance of Internet use or of the value of broadband adoption in the home.”

Poor kids in Philadelphia take little comfort in Marks’ advice when they can’t buy Internet access above DSL speed even if they can afford it. Brigitte Daniel, EVP of Philadelphia private cable provider Wilco Electronic Systems, Inc. applied for stimulus funding for infrastructure because at least 10,000 low-income residences fit into this category. Service providers can’t make a business case for building highspeed networks in those neighborhoods. “Philadelphia isn’t the only urban city facing this dilemma,” she says. “I’ve spoken with providers in other cities who have documented similar issues.”

Internet service may be advertised as available citywide in large metro areas. However, there’s no financial incentive to build infrastructure where ROI prospects are poor.  Furthermore, when infrastructure there deteriorates or becomes obsolete, potential ROI is too low to justify upgrading. Computing centers are as great as the infrastructure that supports them.

Leonard Salcido is Senior Art Director for Change Agent Productions, located in one of Long Beach, CA’s poorest neighborhoods. They teach inner city kids digital media skills, plus provide consulting services to clients. They rely on 3 Mbps over bonded T1 lines. Even though Verizon’s central office is only a block away and Leonard’s organization is a $400,000 enterprise, after multiple attempts they still can’t get Verizon to sell them the same FiOs service Verizon offers Long Beach’s more affluent neighborhoods.

Parents in 10 million families work for wages so low they are still poor. Subsequently they likely have to pay more to get less broadband, which often means they get no broadband. A survey of the Washington, DC area released in 2011 by American University revealed that low income neighborhoods paid three times more ($31.17 per megabit/second) than wealthy neighborhoods ($9.58 per megabit per second). These findings are similar to a Department of Commerce national survey report.

Libraries are key to adoption. However, 76 percent of economic development professionals recently surveyed said broadband’s main impact on individuals’ economic development comes through facilitating home-based businesses, reaching higher education levels and improving job skills. Spend time in libraries in a few communities (which I’ve done), and you discover there can be too few workstations, not enough bandwidth and not enough branches open at times when many kids and most working parents could pursue these goals. Urban city libraries need the same direct link to fiber that rural libraries are receiving via broadband stimulus funds.

This way out

Perhaps Marks could write a piece titled “If I Were President/Governor/Congressman..” and offer sage advice on how to unite the government and private sectors to replicate Washington, DC’s good gigabit fortune in other urban areas, as Kansas City is doing with Google. Then thousands of poor kids could plug their computers into Net connections fast enough to access those wonderful free Web sites Marks recommends. Libraries could become better digital resources.

Also tell us how as an elected leader  you would overcome critics of every attempt to close the divide because they fervently believe poor people are lazy, undeserving or some other insidious stereotype. Is this easy?  No it’s not.  It’s hard. Let me suggest a follow-up column. “If I were in a position of influence, I’d learn about organizations such as the Long Beach YMCA Youth Institute and challenge critics to replicate their success in other cities.”

Each year 200 low-income high school, 300 middle school and 2000 elementary school kids receive the Institute’s hands-on long-term training that builds business-level proficiency in a range of digital media skills. Students become technology instructors, print publication editors and producers of original movie and music while in school, paid interns upon leaving school and for some, managers and staff at the Institute. The Institute’s Change Agent Productions provides a range of online digital media consulting services to clients around the country.

Together, both organizations require a minimum 20 Mbps Internet connections to operate with average productivity, bandwidth currently beyond their reach. With access to a network such as Washington, DC just launched they could train more kids, service more clients and turn more lives around. The network could sustain dozens of similar high-bandwidth operations. Thousands of students could access and manage those multimedia capabilities from their homes. Some could start Web-based home businesses.

Critics blinded by stereotypes only see broadband in low-income neighborhoods as “my tax dollars supporting poor people wasting time.” These communities’ stakeholders see a digital engine to tech-driven economic self-reliance. The smart money should be on economic self reliance.

Craig Settles is a broadband industry analyst and consultant who helps organizations develop effective broadband strategies. Listen to his radio show (Gigabit Nation) and follow him on Twitter (@cjsettles) or via his blog.

Image courtesy of Flickr user See-ming Lee 李思明 SML.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• LTE changes everything; LTE changes nothing
• The future of Wi-Fi in the enterprise
• Netflix may suffer from limited mobility

Should Internet access be seen as a fundamental human right, in the same category as the right to free speech or clean drinking water? The United Nations says it should, but in a New York Times  op-ed, one of the fathers of the Internet argues it shouldn’t. Vint Cerf is the co-creator of the TCP/IP standard the global computer network is built on, so when he says something about the impact of the Internet, it’s probably worth paying attention to. But is he right? And what are the implications if he’s wrong?

Cerf’s position is somewhat surprising because, as even he acknowledges in his piece for the NYT, the events of the “Arab Spring” in 2011 reinforced just how powerful internet access can be when it comes to enabling dissidents in places like Egypt and Tunisia to co-ordinate their efforts and bring down authoritarian governments — despite attempts by dictators in those countries to shut down their access. Cerf is also the “chief Internet evangelist” at Google, so it seems a little odd he would be downplaying the need for widespread internet access and the benefits that it brings to society.

Cerf: Access is not a right, but it enables other rights

In a nutshell, Cerf’s argument seems to be that if we define Internet access itself as a right, we are placing the focus on the wrong thing. The ‘Net, he says, is just a technological tool that enables us to exercise other fundamental rights, such as the right to free speech or access to information — and rights should not be awarded to tools, but to the ends that they enable us to reach. As he puts it:

[T]echnology is an enabler of rights, not a right itself. There is a high bar for something to be considered a human right. Loosely put, it must be among the things we as humans need in order to lead healthy, meaningful lives, like freedom from torture or freedom of conscience. It is a mistake to place any particular technology in this exalted category, since over time we will end up valuing the wrong things.

In the past, says Cerf, we might have seen access to a horse as being a fundamental right in some way, since horses were a requirement for making a living. But the important thing to protect in that equation would be the right to make a living, he says, not necessarily the right to own a horse. Later in his essay, Cerf says a case could be made for seeing access to the Internet as a civil right — that is, a right awarded to us by governments, rather than one that exists inherently in us as human beings — but he shies away from arguing that this should be protected by governments.

One of the arguments against seeing Internet access as a fundamental right is that doing this places all kinds of potential burdens on society — including the potential costs of delivering access to millions or potentially billions of people. Although Cerf doesn’t raise this point, author and former Cato Institute director Adam Thierer makes that case in a post at the Technology Liberation Front, saying anyone who supports Internet access as a right has to answer two important questions: “Who or what pays the bill for classifying the Internet or broadband as a birthright entitlement? [and] what are the potential downsides for competition and innovation from such a move?”

What does seeing access as a right mean?

Thierer argues that not only could ensuring that kind of fundamental right bankrupt governments or societies if followed to its logical conclusion (and should it be just simple access, or is high-speed a right as well?) but that areas where things are determined to be “essential” services often suffer from a lack of competition. In other words, Thierer says, by promoting Internet access for all as a right, governments could actually wind up retarding progress by making it difficult for new entrants to compete:

[C]ompetition often doesn’t develop — or is sometimes prohibited outright — in sectors or for networks that are declared “essential” facilities or technological entitlements. That’s not because they are natural monopolies, rather, it’s because the policies that lawmakers and regulators put in place to ensure universal service ultimately have the counter-productive impact of retarding new entry.

But whether we define Internet access as a fundamental human right or simply a civil right, aren’t we taking a risk by not calling it a right at all? I think we are — and the risk is that it makes it easier for governments to place restrictions on access or even shut it down entirely (a point the United Nations made in its recent report). As JD Rucker notes in a blog post, seeing Internet access as a right is no different from seeing access to medical treatment or clean drinking water as a right. Cars may not be a right, but the ability to move about freely certainly is — and the internet is more like the highway system than it is a car or a horse.

That’s not to say governments have to bankrupt themselves to ensure that everyone has fiber to the curb by their house, only that protections and principles need to be in place that make it available wherever possible — just as we try to make housing and food available to all, not necessarily mansions and high-end restaurants. The Internet is a fundamental method of communication and connection, and is becoming more fundamental all the time, as we’ve seen in the Middle East and elsewhere. Seeing it as a right is an important step towards making it available to as many people as possible.

Post and thumbnail photos courtesy of Flickr users Ryan Franklin and Ray Dehler

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• 12 tech leaders’ resolutions for 2012
• How social discovery is transforming entertainment
• Social media in Q1: commerce and discovery dominated

Currently, Forrester says, China has 209.1 million Internet users vs. the U.S.’s 222.5 million. The firm expects that number to almost double, to 377.1 million, at which point Internet penetration in the country would be at 27 percent. This massive growth in Internet use will likely test the regime’s Great Firewall, the filtering system that the Chinese government uses to keep undesirable content from reaching the masses.

Related research and analysis from GigaOM Pro:
Subscriber content. Sign up for a free trial.

• GigaOM Research highs and lows from CES 2013
• How HR can make the case for workforce analytics
• The 2013 task management tools market