Google Wants Its Own Fast Track on the Web

The celebrated openness of the Internet — network providers are not supposed to give preferential treatment to any traffic — is quietly losing powerful defenders.

Google Inc. has approached major cable and phone companies that carry Internet traffic with a proposal to create a fast lane for its own content, according to documents reviewed by The Wall Street Journal. Google has traditionally been one of the loudest advocates of equal network access for all content providers.

At risk is a principle known as network neutrality: Cable and phone companies that operate the data pipelines are supposed to treat all traffic the same — nobody is supposed to jump the line.

Vishesh Kumar and Christopher Rhoads, Wall Street Journal
December 15, 2008

Communications Daily
June 18, 2007 Monday

Net neutrality rules would harm consumers and thwart competition, according to a preliminary review of groups’ responses to the FCC’s call for comments on whether network access rules are needed. Most groups responding were telecom-related businesses, free-market advocacy organizations and trade associations. All said imposition of regulation would hinder development of the next-generation Internet and contended there’s no need for the rules since current govt. regulations can punish any discriminatory behavior.

“There is no current or anticipated content discrimination or service degradation justifying new regulation by the Commission,” said a filing by Hands Off the Internet, which represents business opposed to net neutrality and has former Clinton press secy. Mike McCurry as a spokesperson. The group released a study it said documents the problems that regulations would cause. “Current regulation and consumer protection laws are sufficient to address any potential harms, which have been greatly exaggerated by those advocating net neutrality regulation,” the filing said.

“For nearly two years, we have heard calls based on nothing but inflammatory hypotheticals to regulate the Internet,” said USTelecom Pres. Walter McCormick. There is no evidence to justify the need, and the FCC needs to “move beyond the overblown rhetoric.” Verizon agreed “there is no history of problems that could indicate a need for regulatory intervention.” Competition in broadband services is growing, making it less likely that the Commission would need to prescribe a “regulatory cure,” Verizon’s filing said. The Commission should reject proposals for “net neutrality” obligations and keep the Internet unregulated, AT&T said in its filing.

NCTA said the Commission’s hands-off approach has stimulated competition between networks. Changing course would be a mistake, the cable group’s filing said. Regulation, no matter how well-intentioned, “almost certainly would reduce competitive investment and constrain growth in networks and the services that depend on them.” The Fiber- to-the-Home (FTTH) Council, which also opposes net neutrality, said there isn’t evidence that network platform providers are engaging in anticompetitive behavior. On the contrary, there’s a “heightened state of vigilance” regarding discriminatory practices on the Internet, FTTH’s filing said. Networks with increased bandwidth are less prone to congestion and have little need to prioritize transmissions, the filing said, concluding that “greater capacity makes the non-discrimination debate recede.”

“There simply isn’t a problem that needs to be regulated,” said U.S. Internet Industry Assn. (USIIA) Pres. Dave McClure: Calls for regulation are based on “fears and speculation,” not facts. If the Commission bases its regulatory decisions on “unfounded speculation,” the result will be stifled investment, slower broadband deployment and harm to consumers, he said. The National Assn. of Manufacturers (NAM) also opposes the regulations, saying they’re necessary only when markets fail. The FCC should “stay the course,” said Marc-Anthony Signorino, NAM dir- technology policy.

Smaller groups weighed in with similar arguments. MovieFlix and Doctors TeleHealth urged the FCC not to adopt net neutrality regulations because it would have “unintended consequences.” The free-market group Americans for Prosperity, along with other members of the Internet Freedom Coalition, said in their filing that regulations aren’t needed. — Anne Veigle

WASHINGTON, June 15 /PRNewswire-USNewswire/ — Three Internet content and application service providers filed formal comments in response to the Federal Communications Commission’s Notice of Inquiry today urging the Commission not to regulate the Internet by adopting network neutrality rules. The Internet content providers, MovieFlix, Doctors TeleHealth Network, and KinderStart differ from some other content providers who think the government needs to adopt network neutrality regulations.

Interesting comment from FCC chairman Kevin Martin at his Senate renomination hearing last week:
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“Martin said he did not oppose Google charging more to companies for higher-profile placement on their search engine, and likewise did not opposed a telephone company like Verizon charging more for higher-bandwidth services like streaming video, suggesting that if they could not, they might not be able to afford to provide those services.”

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Martin’s pegged the so-called Net neutrality issue in two ways.� First, there’s no doubt that if Congress passes this, the online giants like Google and Amazon will have a legal loophole to avoid paying for the broadband access they consume.
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But there’s a larger issue too.� Martin’s also right about the inevitable problems of bringing in complex new regulations over something as dynamic as the Internet.� As recent history shows pretty decisively, the Net has a way of humbling companies that make things difficult for consumers.�
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Exhibit A:
Microsoft’s MSN

Exhibit B:
Dell’s “DJ Ditty”, which was supposed to dethrone the iPod.�

Exhibits C, D, E, F & G:
Google’s instant messaging service (Ranked 10th in IM services with just 2 percent of MSN’s users),
Google’s online spreadsheet service (Supposedly a challenger to Yahoo’s leading service, it ranks 40th among financial websites),
Google’s blog search (It generates only about 17 percent of the traffic of Technorati),
Google’s networking site Orkut (It has less than one percent of MySpace’s traffic), and
Google’s email (It has only about a quarter of the users of Yahoo and MSN’s mail service)
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That’s why Net users should heed the warnings from David Farber, Kevin Martin and other independent Internet analysts – an active consumer base is a far cheaper and more effective solution than piles of new government regulation over the Net.

Talk about a smoking gun! According to a July 4 Reuters report, Google’s chief evangelist, Vint Cerf told reporters:

“If the legislators … insist on neutrality, we will be happy. If they do not put it in, we will be less happy but then we will have to wait and see whether or not there actually is any abuse .” [our emphasis]

There you have it! For months, we’ve been saying that Congress has no business passing new Internet regulations based on hypothetical fears of some future problem. The inevitable results would be higher legal expenses and a slow-down in investment opportunities.

But the big Internet companies – Google, Amazon, eBay, Microsoft – all denied the need was speculative. They said that there was urgent need for new regulations.

Now the truth is unveiled: After losing last week’s Senate committee vote, Google has conceded that the telecommunications industry has not abused its position, and existing anti-trust laws are getting the job done.

This is a real breakthrough. Will Google and their allies with Save The Internet stop with their theatrics? Guess we’ll just have to wait and see…

In the end, the hit parade of hypothetical horrors failed to carry the day. Preemptive regulation is rarely a good idea and as many of the Senators’ statements yesterday showed, neither is a vast new expansion of federal power over the Internet.

So-called Net neutrality may emerge again on the Senate floor – despite the lopsided (and clearly bipartisan) 15-7 final vote. But in the meantime, it’s worth remembering some of the truly independent voices that came out in eloquent opposition to suffocating new regulations on the Internet:

* The 700,000-strong Communications Workers of America spoke on behalf of working families who depend on broadband deployment.

* LULAC, the nation’s leading advocate for Hispanic Americans, warned lawmakers in a June 20th letter that this proposed new regulations were “complex and potentially damaging to the Internet.”

* David Farber, former FCC Chief Technologist, and two former FCC Chief Economists

* Newspaper editorials from The Wall Street Journal, The Washington Post, The Washington Times, The Oregonian and many others that warned against new Internet regulation.

Thanks for speaking out, folks. Your voices helped carry the day.

Bravo to the Washington Post, which on Monday came out with a clear and concise editorial carefully weighing all sides of the Net Neutrality debate. Ultimately, they come to the conclusion that activists such as Save The Internet are tilting at windmills, and stringent new laws are unnecessary:

The weakest aspect of the neutrality case is that the dangers it alleges are speculative. It seems unlikely that broadband providers will degrade Web services that people want and far more likely that they will use non-neutrality to charge for upgrading services that depend on fast and reliable delivery, such as streaming high-definition video or relaying data from heart monitors. If this proves wrong, the government should step in. But it should not burden the Internet with preemptive regulation.

We couldn’t have said it better ourselves. The Post is just the latest in a series of newspapers, including The Oregonian, to make the right call about the debate over Internet “neutrality” laws.

There are two problems with Net “neutrality” and The Post has pegged them both. First, Congress shouldn’t shackle the Net with regulations based on dangers that are totally “speculative” (The Post’s word, not ours). Second, this whole pro-regulation push from Amazon, eBay, and Google is just their effort to escape paying part of the upgrade cost for the tomorrow’s networks. Activists in the Save The Internet crowd have plenty of energy, but not much of an argument — and the more people tune in, the more they are arriving at this conclusion themselves.

If your tastes are a little more to the right, then check out Steve Forbes’s op-ed in Monday’s Wall Street Journal (requires subscription) and the question he succinctly poses:

[W]hat network operator would be silly enough to keep investing billions in network innovations if the fruits of its innovation had to be given away at below cost?

We’ll be talking more this week about these and other issues. But in all, the week’s off to a pretty good start!