August 26, 2010

Google, Verizon, and Getting Real

Greetings. Reactions to the Verizon-Google Legislative Framework Proposal have been splattering around the globe ever since the two firms announced the plan earlier this month.

The proposal has some clearly worthwhile elements, yet is problematic in other aspects. Much more on this in a moment.

To date I have mainly noted my distaste for the many rude and basically "over the top" reactions that have dominated media coverage of the announcement.

These reactions have been nothing short of wacky in some cases. A small group of protesters dropped in on the Googleplex, singing off-key protest songs ("Hands off the Internet, It Must be Free!"), creating some fodder for newscasts around the world, and some laughs for Jon Stewart (who, in the same segment also featured out-of-context clips of Google's Vint Cerf).

And the Net has been ablaze with postings, articles, and a wide range of rants calling Google evil, illustrations adding horns and a pointed tail to the Google logo, and otherwise raking Google over the coals for the supposedly reprehensible act of jointly proposing an "open Internet" plan with Verizon.

"Oh Google, why hast though forsaken us?" cry the accusers, sometimes phrasing their protestations both impolitely and with vile tone.

Meanwhile, few if any protests have been aimed at Verizon, Google's partner in this proposal, perhaps because (as Dr. Sidney Schaefer notes in the classic 1967 film The President's Analyst) pretty much everyone already hates "The Phone Company."

For those parties who have falsely accused Google of being a "monopoly" -- on the basis that it has become large and dominant in various aspects of Internet services -- the joint proposal demonstrates the true nature of monopoly power -- and this has nothing whatever to do with Google, which has built its business fair and square, without monopoly advantages bestowed by governments.

Not so the now dominant ISPs. Verizon, AT&T, Comcast, Time Warner -- all have created their empires upon the foundations of what were originally government-sanctioned monopoly telephone or cable services. Even today, many of those same monopoly-era facilities are in use by these firms. DSL-technology services (including AT&T's U-verse) are routinely deployed over copper pairs that have provided basic telephone services for almost half a century or more. Conduits, poles, tunnels, cabinets, pedestals, and vast numbers of buildings both large and small were built with monopoly advantages and now provide the infrastructure for broadband deployments by these same firms in new incarnations and combinations.

These telecom giants have used their vast resources, including lobbying expertise and monies that dwarf those of firms like Google (in the case of the telcos, more than a century of such expertise) to maintain privileged positions for themselves.

Meanwhile, these same telecom companies have carefully controlled broadband deployments, often cherry-picking the most lucrative areas for high-speed Internet, and in some cases even breaking deployment promises that had been made with local and state governments, essentially penalty free. Even now, Verizon recently announced that it was ceasing most new FiOS expansions to instead concentrate on increasing "market share." Such market share battles don't get new broadband to people without it, rather they shuffle pie slices among the existing players in any given locale.

While much of the world has created true broadband competition by requiring the sharing of physical broadband facilities among competing firms, in the U.S. the dominant ISPs have successfully fought such reasonable requirements with tooth and nail.

All of this is important to keep in mind when thinking about the Verizon/Google proposal, because it's obvious that Verizon entered the ring from a position of far greater power both now and in their earlier discussions with Google that eventually led to the framework announcement.

Google may have access to user data for Google-related services, but Verizon controls every bit, every byte of user data for every site -- including Google -- that Verizon's customers wish to access on the Internet.

The dominant telco and cable ISPs have successfully "managed" their goals within the current toxic political environment to assure that the sorts of regulatory focus and overhaul that Google is known to support -- often subsumed under the label "Net Neutrality" -- are likely impossible to accomplish in a comprehensive manner, with the FCC increasingly appearing as largely impotent in terms of positively affecting these issues.

Where does this leave Google? Where does it leave us?

The status quo is not indefinitely tenable. My interpretation of Google's motivations in this matter is that Google desperately wants to at least get the ball moving within this sphere, with the understanding that even a suboptimal proposal -- and remember, that's all it is, a proposal, a starting point -- is better than nothing, and can serve as a catalyst for further positive change moving forward.

The nature of the framework proposal itself reinforces this analysis.

The plan is sufficiently general that there is little within to seem threatening to most existing Internet-related business models or applications, certainly when compared to the current essentially regulation-free laissez-faire situation.

But that same generality creates something of an "empty vessel" effect where observers can easily project their own hopes and fears into the missing details of the document.

What are lawful applications? How will reasonable network management decisions be made? How to avoid unreasonable restrictions on wireless services as wireless broadband increasingly competes with wireline services on a performance basis? The list of potential questions is a long one.

And while the document suggests mechanisms for making these sorts of determinations, the devil is always in the details, and it is not unreasonable to have concerns that if such mechanisms are not forthcoming or prove unsuitable to the task, the risk is real that even more problems could be in the offing.

Two quick examples of why details matter so much. There's no way to determine from the current proposal whether the common ISP practice of banning (through terms of service and/or port blocking) most subscribers from operating well-behaved, legal servers of whatever sort they wish. Such bans have often been used as a wedge to push users upward toward more expensive service tiers.

Nor is it clear what sorts of services would qualify for the "additional or differentiated services" offerings (that is, not part of the public Internet per se) proposed by the framework plan. Verizon's CEO, during the conference call announcing the proposal, specifically mentioned "entertainment services" and 3D television -- but these seem among the more problematic examples -- especially given the rapid advances in video encoding technologies (including related to 3D).

This spotlights a pertinent concern about differentiated services in particular -- the risk that the existence of non-neutral differentiated services tiers might suppress the development of technologies that could have performed the same functions successfully on the public Internet, where greater bandwidth and capabilities could be deployed in a more competitive manner to benefit a larger community of users.

Still, the lack of such details should not be used to condemn the proposal itself, since by its very nature such a proposal couldn't reasonably be expected to contain such levels of specificity.

And though I do personally feel that Verizon's power and monopoly history have helped to create a severely uneven playing field, and that a strong regulatory approach to net neutrality and open Internet issues would be both appropriate and desirable, the reality is that this is increasingly unlikely to be possible in the short term at least.

I am fundamentally a realist, and while slogans, protests, and wishful thinking may all have their place, I don't feel that they're well suited for dealing with complex technology policy matters.

It is inappropriate to condemn Google for assessing the current telecom, regulatory, and political landscape, and coming to the quite reasonable judgment that a very general joint proposal with Verizon carried not only the potential for positive movement related to long-stalled Internet and broadband issues, but would also certainly stimulate renewed public discussion and consideration of these important matters.

Rather, this is an attitude that should be congratulated as completely realistic and appropriate given the circumstances that we must deal with, like 'em or not.

Scorched earth, take no prisoners, no compromise positions are the surest path to continued deadlock and the perpetuation of the current limbo -- with little hope of useful forward motion to prepare for the new classes of broadband issues that are bearing down on us very rapidly indeed.

The Google/Verizon proposal, despite its flaws and necessarily inherent lack of details -- or perhaps even because of them -- has provided a necessary "kick in the pants" to all stakeholders in the Internet arena who are concerned about where the Internet and broadband services are headed, and how we will formulate the complex policies that must drive, control, and nurture these vital technologies into the future.

Google -- and Verizon -- both deserve our thanks for getting this show back on the road.


Posted by Lauren at August 26, 2010 01:20 PM | Permalink
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