Thursday, August 05, 2010

About the Verizon/Google "Deal" on Net Neutrality

Marvin Ammori

Yesterday, Bloomberg reported that Verizon and Google have made a deal on network neutrality policy they'd like to see in America. That deal (surprise!) is Google can get special privileges on Verizon's network. The Huffington Post splash page mocks Google's slogan: "Don't Be Evil" with an asterisk. Asterisk: "unless it's profitable." Josh Silver called it the end of the Internet as we know it.

I want to explain why I think this deal matters, and why it doesn't. And it might not be for the reasons you think.

The Deal

Net neutrality is simply a proposed rule forbidding Verizon, AT&T, Comcast and other ISPs from engaging in special deals to block or favor certain content on the Internet; it's to keep the Internet an open general purpose network equally accessed by all innovators, speakers, and businesses. Like it is today. The carriers want to turn it into a controlled medium.

Among other things, according to the New York Times, the deal essentially says that Verizon will be able to cut special deals with any company--like, um, one called Google--to prioritize that company's traffic, giving that company an advantage online over any other content online. Google decided it could make more money getting special--or even exclusive--treatment on the Verizon network because few of their competitors could afford to get the same treatment.

(Note: Google is denying the Times report through a Tweet. I'll spell out the implications assuming the Times is right.)

Business Examples

So, as a business matter, let's say you use a Verizon mobile wireless card (an EVDO card) for your laptop (in addition to having a a Verizon mobile computer).

Google's products can get priority on your laptop based on commercial deals.

  • Google's Youtube may get Verizon-special treatment denied any competing video site, from to Netflix. (This is the example given by the New York Times today.)

  • Google's Orkut, a social network once known only for being big in Brazil, gets better treatment than Facebook. 

  • Google's Blogger--a blogging technology--gets the Verizon-special preference denied WordPress.

  • Google's Chrome browser happens to work a lot better than Internet Explorer and Mozilla Firefox.

  • Google's GChat video gets special treatment compared to video phone services like Video Skype.

  • Google's Gmail, an email service, gets better treatment than Hotmail or Yahoo!

  • Google Books gets special treatment denied any competitors.

  • Google's domain name service gets preferred treatment denied competitors like OpenDNS, which could even be blocked under the deal.

  • Google's advertising network can get Verizon network priorities.

  • Google's Froogle site gets special treatment denied everything from Groupon to Ebay to all those random "deal of the day" sites.

  • Google Voice could get special treatment compared with those other online phone services.

  • Google's Picasa could get special treatment over Flikr, for photo albums.

  • Google's Buzz could somehow get special treatment over Twitter.

  • Even Google Wave could get priority... Really.

So, as a business matter, the deal is important. And, yes, it may be the end of the Internet as we know it, if the FCC blessed such deals. The deal yesterday announces that Verizon and Google open the door to all of this.

Lobbying Not Policy

This deal matters for lobbying. Essentially the business partners have agreed on how their DC lobbyists will approach a certain important issue on which they once disagreed. In some ways, it is like AIG and Goldman aligning their lobbying. Or maybe a few large fisheries joining forces with BP's lobbyists. Or a medical society joining with the insurance companies.

Hundreds of organizations have fought for net neutrality, and though Google was honestly one of my favorite allies (a lot of talented and nice people work in the DC shop), they were only one player among very many.

And Google and Verizon do not decide how to regulate themselves. On paper, at least (and that paper is the Constitution), we have a government of the people. We have an agency, the Federal Communications Commission, charged with protecting the public interest and that has declared a policy of ensuring an open Internet for all consumers and innovators, for all businesses from Expedia to, for all speakers from bloggers to Twitter-celebrities to emailing teens and grandmas.

How this Deal Matters for Policy

This deal only proves that the biggest corporations have incentives to disadvantage innovators--which will harm our economic growth, job creation, and global competitiveness. It only proves that the threat to network neutrality in the market is real. It only proves that network neutrality rules are necessary. And it only proves that the FCC's negotiation-talks, which I discussed yesterday, receive little respect from the corporations engaged in them (maybe for good reason).

The deal does not indicate that US government policy has been decided. Especially when the Google-Verizon deal contradicts the policy position of a few people whom our Constitutional structure does imbue with authority over government-policy: President Obama (enjoy this speech at Google headquarters where he promised to take a backseat to no one on net neutrality) and the FCC Chair. Because those two strongly support network neutrality, you'd expect policy to serve all Americans. Unless I should put an asterisk after their names as well.

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