September 11, 2008

Google, ISPs, and "Monopolies"

Greetings. Anti-net-neutrality forces seem to have converged on a common set of talking points where they attempt to use a spurious "but Google is worse" defense to explain away the anti-competitive ISP situation in the U.S.

Even a cursory examination of the Internet environment demonstrates the inanity of the comparison.

ISPs control all access to all Internet services for most consumers and businesses. Google, like every other Internet service, is literally at the mercy of ISPs to pass along user traffic appropriately.

What's more, for most consumers, practical, affordable choices of broadband ISPs are limited to two in the U.S. In many areas, that's reduced to one. A surprising number of people can't get affordable broadband at all. Wireless ISPs remain a niche segment, which while large in terms of the number of providers, is very small in terms of market penetration. Line of sight issues, outside antenna requirements, or costs currently make wireless an impractical choice for routine broadband access for the majority of consumers.

So as a practical matter, ISP choices are very limited, and the ability of consumers to choose among competing ISPs, and then to rapidly switch, is similarly constrained.

Google on the other hand is in an entirely different situation. Not only are they dependent on ISPs to reach their users, but users have the ability switch away from Google to a range of competing search, e-mail, and other services almost instantly.

Let's not confuse Google's large market share with the sorely limited ISP marketplace. Google's share is based almost entirely on consumer satisfaction -- by individual users, by sites that use their ad and analytics services, and so on. Yes, in total Google collects a lot of data across the Internet ecosystem, but this is almost entirely the result of voluntary decisions by users at various levels, not the result of an artificially constrained marketplace as in the case of ISPs.

Google consistently ranks very high in consumer satisfaction for a range of Internet services. Yet ask people how they feel about their DSL or Cable provider, and outpourings of affection for these ISPs are usually not exactly forthcoming. Telephone and cable companies still tend to rank very low on customer satisfaction lists.

Whenever people try to blur the difference between ISPs and Google in their arguments, it should be treated as a red flag that something disingenuous this way comes.

--Lauren--

Posted by Lauren at September 11, 2008 02:30 PM | Permalink
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