Google NOT Turning Its Back on Network Neutrality

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Updated @ 9:30 pm: In response to an earlier story in The Wall Street Journal, Google offered a clarification and reaffirmed its stance on network neutrality and pointed out that it is not backing away from it. It has dismissed the WSJ story as confused. Instead, Google explained that the OpenEdge effort (the subject of the WSJ story) was a plan to peer its edge-caching devices directly with the network operators so that the users of those broadband carriers get faster access to Google and YouTube’s content.

“Google has offered to “colocate” caching servers within broadband providers’ own facilities; this reduces the provider’s bandwidth costs since the same video wouldn’t have to be transmitted multiple times,” Richard Whitt, Google’s Washington telecom and media counsel, wrote on the company’s policy blog.

He went on to say that all these colocation deals — done via projects like OpenEdge and Google Global Cache — are non-exclusive and “none of them require (or encourage) that Google traffic be treated with higher priority than other traffic. Despite the hyperbolic tone and confused claims in Monday’s Journal story, I want to be perfectly clear about one thing: Google remains strongly committed to the principle of net neutrality, and we will continue to work with policymakers in the years ahead to keep the Internet free and open.”

The reason Google can do this is because the company has the resources and the network infrastructure to pull this off. That alone gives the company an advantage over others. Original report below the fold.

The Wall Street Journal reports that Google (s GOOG), long a network neutrality champion, is looking to cut deals with broadband providers — both cable and phone companies — to get faster access for its own content. The Journal claims it has seen documents that show that Google has made these overtures. I have reached out to the company’s PR to get more information and will update my post accordingly.

According to the Journal, one cable operator who was approached by Google has been reluctant to do the deal because of legislative backlash. “If we did this, Washington would be on fire,” he told the Journal reporters. Nevertheless, by exploring this option, Google is going against its long-held belief in network neutrality where all data packets are treated as equal by network operators.

The WSJ story doesn’t quite outline how this system is supposed to work, but my best guess is that Google would essentially put a majority of its content and services closer to the service provider’s infrastructure. It is not clear how is this different from the kind of deals Akamai (s AKAM) has for its CDN network. Of course, Google could go for preferential arrangements that mimic the deals it has cut in the wireless arena with T-Mobile, which makes it easy to access Google services on its mobile phones.In return, wireless carriers get a piece of the Google’s ad revenue.

While it might seem like a smart move in the short term — it can put Microsoft, Yahoo and Facebook at a disadvantage — in the long run, this move will be like swinging the tiger by the tail. The carriers will start with a fraction of the revenues, but over a period of time they can increase their cut, and Google would have no way to put the genie back in the bottle.

Google is not alone — other, older Internet companies are turning their back on network neutrality. The Journal says both Microsoft (s MSFT) and Yahoo (s YHOO) have also started to back away from a coalition that was formed to protect network neutrality two years ago.

“Network neutrality is a policy avenue the company is no longer pursuing,” Microsoft said in a statement. The Redmond, Wash., software giant now favors legislation to allow network operators to offer different tiers of service to content companies.

Even the so-called Internet liberals have started to back away from the concept of network neutrality, the Journal says.

“There are good reasons to be able to prioritize traffic,” Mr. Lessig said later in an interview. “If everyone had to pay the same rates for postal service, than you wouldn’t be able to differentiate between sending a greeting card to your grandma versus sending an overnight letter to your lawyer.”

Of course, Larry Lessig (a adviser to President-elect Obama), an academic who roared and helped champion such powerful new ideas such as Creative Commons, forgets that we live in a world where access for broadband is provided by a duopoly that has thoroughly corrupted the FCC and legislative system. Who is going to monitor them the way  the U.S. Postal Service is monitored? Where is the competitive landscape akin to one that allows DHL, FedEx and UPS to compete with the USPS. (Lessig rejects WSJ’s claims on his blog.)

Forget Lessig for a minute. Google’s attempts to get its packets ahead of others by paying the carriers is going to be a body blow to the network neutrality movement.  Or as they say, Et tu, Larry & Sergey?

Given how close President-elect Obama is to the current Google management, I can only fear the worst. Many startups might skip over this issue, which I constantly bring up, but they need to wake up and realize that in the end they are all going to be impacted if network neutrality is backstabbed to death. If Google can buy better performance for its service, your web app might be at a disadvantage. If the cost of doing business means paying baksheesh to the carriers, then it is the end of innovation as we know it.

A part of me doesn’t want to believe this report — I mean it goes against everything Google stands for. If true — and I have no reason to doubt a fine publication like the Wall Street Journal — it proves for once and for all that Google’s talk about ‘do no evil’ is nothing more than hot air, a fancy phrase designed to get more publicity than anything else. Google, at the very core, is no different than any other monopoly before it.

75 Comments

Shaun Mailing

Google’s monopoly isn’t slowing down, I have one of their Google Android phones. Guess what? Hotmail’s the only site that doesn’t work on their internet. I can access it via the email app but it’s extremely slow to load. Google Mail on the other hand works perfectly fine and loads at lightning speed. Hmmm…

Brett Glass

Om, why does your argument above again rely on the false premise that Internet service is a duopoly? The fact is that there are more than 4,000 independent, competitive ISPs in this country, of which I am one. Impose “network neutrality” regulation, and it would strangle that competition and create the duopoly you so deplore.

Google, on the other hand, *is* a monopoly. That’s the reason why the government’s extremely laissez-faire officials — who let XM merge with Sirius, AT&T with SBC, and Verizon with Alltel — nonetheless cried foul when Google tried to execute a deal (not even a complete merger) with Yahoo!.

And Google has bought many friends with its money. The salary of Larry Lessig is largely paid by Google’s grants to Lessig’s operation at Stanford University, and the lobbying groups that filed the “network neutrality” complaint against Comcast at the FCC are likewise the beneficiaries of Google’s “largesse.” Is it any wonder that they are all subtly shifting their positions (especially Lessig) to toe Google’s line?

Neno Brown

Google! welcome to the world of corporate finance, time to start wearing suites, hobnobing with poloticians, maybe start getting into missile technology while your at it.

grant czerepak

The reality is Google is evil. However, it is a new evil and we are not equipped to deal with it yet. And Google is not the only new evil company out there.

thegeniusfiles

I’m not sure I agree that there’s anything to criticize Google for yet. Their proposal seems like a logical attempt to scale up their services. How can you compalin about slow/spotty service of Gmail or YouTube, then criticize a serious attempt to solve the problem? Now, if Google uses their new capability to unfairly exclude other traffic, then they should be punished under antitrust laws. The fact is that some company is bound to be the biggest no matter what. Is Google really so scary? Are you sure you want to hobble them just because they are big? Personally, I think Google is much more open and transparent than any other large corporation I can think of.

Ericson Smith

How is this different from funadvice going to a CDN?

Its a bit different because google has the wherewithal to bypass a service like Akamai. Google is big enough to do it. Are you saying, Om, that because they’re big enough to be their own Akamai, that they should not do it?

Now, what would level the playing field is if they opened this up as a service to compete with Amazon’s Cloudfront (which btw, we are now using very nicely). So there would be more players at the ISP level that ordinary developers can have access to.

SRSLY FRIENDLY

@ronald – Yeah, Google is pulling MS’s old tricks. Dunno why folks go to the mat to defend GOOG’s behavior. Me? I don’t own GOOG (or MSFT, YHOO) stock, so I just call ’em as I see ’em.

There are several problems with Goog’s position:

1) Once you put caches at ISPs, who cares about Network Neutrality? Only the suckers ship their content over the long-haul. Startups can’t compete.

2) Lessig’s point on the issue today is that Anyone should be able to buy equal access to caches. If GOOG wants to install caches, that aren’t *equally* to everyone, then GOOG is way out of line. Remember this point because goog’s proposed OpenEdge is, so far, a closed system. Open in name only.

3) Regardless NN, whether or not it inappropriate for content providers to get up inside ISPs. There’s too much spying and conflict.

SRSLY PPL, I love Goog, too. This is just way out of line.

Nick Stamoulis

Google is not stupid, they know everything they are doing. Give us free analytic software was probably one of the smartest moves they have ever made. Talk about using some valuable information to their advantage.

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