Blog Post

With Google's Money and Infrastructure, Does Net Neutrality Really Matter?

Earlier today, The Wall Street Journal published a story outlining Google’s (s goog) OpenEdge efforts in which it portrayed the initiative as a sign the company is moving away from the network neutrality cause. The idea of equal access and equal treatment of all packets has been a network ideal for a long time and Google has been among its staunchest defenders, which is why I was left incredulous by the report. The story was quickly debunked by Richard Whitt, Google’s Washington-based telecom and media counsel, who labeled it as “confused.”

David Isenberg explains in excruciating detail the differences between Google’s OpenEdge edge-caching efforts and what network neutrality means to its advocates. “The concern of Network Neutrality advocates is not with access but with delivery…Since the edge caching Google is proposing is about access, not delivery, there’s no problem,” writes Isenberg, who is a well-regarded telecom and broadband thinker.

But when it comes to access, the argument is different. By spending an ungodly amount of money on its infrastructure, Google has been able to build a massive advantage over its rivals. This edge-caching network can only serve to increase that advantage.

Here’s how: By getting carriers to connect directly to via OpenEdge, consumers are able to better experience Google’s products, such as YouTube, because videos have to traverse fewer networks. As Google correctly notes, these are non-exclusive deals with carriers; anyone can sign up for them, and the likes of Akamai (s akam) and Limelight (s llnw), for example, already have similar deals in place. In other words, Microsoft (s msft) and Yahoo (s yhoo) can build their own private caching network if they want to, too.

No money has to change hands in these interconnection deals, which are already commonplace in telecom. But while traditionally they’ve been made between carrier operators, with Google’s OpenEdge, the search giant would be able to shunt traffic to broadband owners’ networks without paying money to intermediaries. There is nothing illegal about this.

Startups can get similar kinds of service by buying bandwidth from companies such as Level 3 (s LVLT) and CDN operators such as Akamai.  In other words, their cost of doing business will be much higher than Google’s. As I noted in my post from last December, Google’s infrastructure is its strategic advantage, and this new aspect of the business only helps them lower their costs and hence their profitability.

“Network neutrality is a myth, and it always has been,” Richard Bennett, a fellow broadband enthusiast, writes on his blog, which I think sums the situation up nicely. In response to the post I put up soon after the WSJ’s story was first published, Bennett also left this comment: “Google already has a fast lane to most of the Internet thanks to its private server farm being wired directly to most of the public exchange points. This plan would simply put Google on an equal footing with Akamai, who already has a footprint inside major ISP networks.” He goes on to add, “Google has to do something like this to avoid being clobbered by ISP-friendly P4P as well as by Akamai.”

Google has other reasons to roll out this edge caching service. Akamai and other CDN operators are working on technologies that would allow them to insert and better target advertisements from their edge devices. Even Cisco Systems (s CSCO) wants to get into the game; it’s been working on a new edge router that allows it to insert advertising for its customers, such as cable companies.

If these technologies catch on, then Google’s core advertising franchise could come unglued. No wonder the company is ready to cut deals and grow its presence on the edge of the network.

22 Responses to “With Google's Money and Infrastructure, Does Net Neutrality Really Matter?”

  1. les madras

    there is a huge difference between a CDN like Akamai and what Google wants to do. When the same content needs to be distributed to a large number of users, a CDN moves that content to the “edge” for efficient distribution. What Google wants to do is to move its database to the edge so that it can deliver dynamic and personalized content much faster than anyone else.

    It is fine for the networks to charge extra for this placement, but only as long as this does not slow down those who cannot pay.

  2. Small Webmaster

    Google’s edge caching is anticompetitive. To see this, you just have to take off the doctrinaire glasses of the “network neutrality” activists, who are myopically focused on the pipes and on bashing and regulating ISPs (and are also mostly funded by Google).

    Think about it. It’s obvious that Google will be able to place an edge cache at the site of any ISP it wants, probably for free. Why? Because YouTube and its related services consume SO much bandwidth that the ISP would be crazy to say no. The ISP would surely save big on its backbone connection. Terabytes per month on YouTube alone. That’s money in the bank right there. And service would be faster, too.

    But would an ISP allow just any content provider to put a cache at its sites, for free or even for money? Doubtful. Caches take up space and power and require access for maintenance. The ISP needs to be strongly motivated, by big bandwidth savings, even to consider it. And only big companies like Google have that to offer. If a small Internet startup were to call your local cable company and ask for “co-location space,” the person there would probably say, “That’s not a product we sell to the public.” That is, if the person who answered the phone at the cable company even knew what it was.

    And of course, would-be competitors of Google won’t be able to buy space on Google’s private edge caches.

    So, in what way is this neutral? Google can get its servers into places where can’t, and can make its services more responsive than the startup’s. Therefore, Google is indeed getting preferential access to infrastructure. It’s just that the infrastructure happens to be co-location space instead of pipes. And it has a big advantage there, because co-location is much more difficult to obtain than bandwidth. You can get any Internet carrier to sell you a pipe. But co-location space at ISPs, which is more cost-effective than buying pipes, isn’t necessarily even available to you unless you’re Google. So this is really, really anticompetitive. And how could anyone say it was “neutral?”

  3. Thank You, Google

    As its apologists contort themselves in logical knots trying to square Google’s move with all that they hold to be true, Google has in fact done us all a great favor. It has exposed the lie behind net neutrality.

    Whether Google ever really believed in net neutrality or just saw it as a useful means to foil competitors is immaterial. And while Google’s spokespeople will no doubt continue to toe the party line, Google itself will continue doing what it has been doing since it achieved search domination–leverage its enormous data center and fiber infrastructure to obtain a disproportionate advantage over would-be competitors. Nothing wrong with this dog-eat-dog capitalist behavior but for quite some time that behavior has been cloaked in the feel-good fabric of net neutrality. Now the cloak as been removed.

    The laughable part of this whole episode is that many in Washington (both outgoing and incoming) actually believe that important traffic, especially video, travels over the internet. Does anyone think that Apple would trust the delivery of high-definition movies to “the internet”? Of course not. Most of that traffic, from Apple, Yahoo, Google, and others, is distributed to remote storage or caching points over high-speed fiber connections that come with service quality guarantees. In many cases the only thing traveling over “the internet” is the DNS lookup.

  4. The essence of Net Neutrality can be phrased as ” All IP Packets are created Equal”. No ISP should block or prioritize any traffic based on what the Packet carries. That is, no VoIP/Skype, YouTube video, music download or Bittorrent traffic is going to be given any prioritization based on its nature. All packets will be equally treated by the network infrastructure.

    What is wrong with investing in more servers and putting them closer to the users? With Google/YouTube handling such a huge traffic, it is normal that they want to cache as close to the users as possible to make the service better.

    Net Neutrality is not about let’s forbid anyone to improve their service over others because they invest more.

  5. It first dawned on me that net neutrality really is a myth at a conference Cynthia Brumfield hosted on IP video policy earlier this year. People pay for faster delivery of their content every day.

    Amazingly, a former FCC economist at the conference suggested quite blithely that content owners would soon be in the pipe business (i.e. broadband networks). He was right, of course, but his nonchalant attitude shocked me. This is a serious issue, and one that really needs to be discussed. Especially since many people don’t understand how the system works today and how it’s going to work in the very near future. The Internet was a great democratizing force, but, like with anything else, power is now consolidating. Clearly we have to figure out new anti-trust rules for the Internet age.

  6. @OM
    No technical details on how they do it. My first stab on that would be, track ips to company A page PA, next another company B page PB same ip (reasonable time frame), now if ip visits c I replace a generic link on page PC with something specific. The user behind ip might be interested in since they went to PA and PB.
    Not exactly manipulating or inserting traffic, just bare bone pattern analysis.
    Correct me if the tech works differently, I’m just guessing.
    How many CDN servers can any ISP handle, is the unlimited space available?

  7. OKAY, I get it.. I think Edge Caching is a smart solution.. but then it should not be GOOG only caching. What is appropriate is that GOOG can “donate” servers to ISP for caching and they cache whatever is more popular in the region.. If GOOG thinks that their content is “most” requested ala Youtube then the servers ll automatically cache it more. Simple?

  8. As I said before…

    Google is big enough to replicate what Akamai does. This is basically what it is.

    Why is this different from any CDN?

    What would be great is if google could offer this as a service just like how Amazon is doing with CloudFront.

  9. Can someone please explain where Akamai has an ad network, content and aggregation ? Apples and Oranges, both fruit but quite different in detail.
    Or, _NO_ om it doesn’t matter the train as left the building, if someone wants to compete they have to change the game.
    What does internet traffic mean, there where always large private networks which never belonged to the network of networks. IP traffic is not equal internet traffic.

  10. Todd Spraggins

    It is all about perspective. I could care less if Google is able to put cache in the core because my problem is at the access edge where I have only one provider to get on the internet. And I am sure there are start-ups that think that this is the largest problem in the world and needs immediate regulatory action. But in the end, as long as there is not preferential treatment, then I think this fits well with Lessig’s MFN litmus test and within the bound of adhering to NN principles.

    I have to ask if anyyone would have even noticed if Google had just used Akamai in the first place. Why are people not upset that the CDNs do this anyways. I do not understand how a commercial model that never appeared on the NN radar is now so evil.

    IMHO, having Google get more involved with the core is better. Go read Cisco’s VNI where they have the scariest datapoint of all – the Internet is going private (more than 50% of all IP traffic will be carried on private networks next year). Let’s figure out how to get packets to users without being poked, prodded, mangled, reset, deleted, metered and ad inflated in coach before having the debate over whether or not it is socially acceptable policy for one to pay for a first class ticket.