The National Broadband Plan: The Good The Bad and The Ugly – Part II



By now, it should be obvious to everyone that Google has been trying hard to create other revenue generating business models to help them to reduce their dependency on their sole search advertising business responsible for over 90% of their annual revenue. It is also becoming obvious (at least to me) as the company fails more and more with their new businesses like their Nexus One smartphone and Google Wave,  they are becoming more evil than ever.

Google is in talks with Verizon that would kill the Net Neutrality for good once (or if) it goes through. It is certainly time to revoke Google’s “Do No Evil”. What the hell happened to their Public Policy statement?  “Hey FCC, keep the Internet open — and awesome!

THE GOOD

Once the News broke yesterday, the Federal Communications Commission (FCC)  ended closed-door talks with several companies over the future of net neutrality and lashed out against the practice of paying for faster transmission of data over the Internet.

“Any outcome, any deal that doesn’t preserve the freedom and openness of the Internet for consumers and entrepreneurs will be unacceptable,” FCC Chairman Julius Genachowski told reporters yesterday.

THE BAD

Google is orchestrating their deal with Verizon that would allow Verizon to prioritize Internet traffic as it sees fit. Basically, the companies would charge some Internet content providers more than others for the transmission of their data to users across the world. i.e.

Company A delivers video-conferencing services in competition with Company B. Company  A strikes a deal with Verizon, which gives Company A’s data packets priority over everyone else’s traffic, including Company B.

If you liked the features of Company B and had been using the service, too bad. Your data just won’t flow as cleanly as A’s will.

In other words, Verizon (and any of the other “last-mile” internet providers) get to play traffic cop, and shake down companies for whatever they think they can charge to get their packets at the head of the line.

You could argue there is a market for that competitive advantage — but the Net Neutrality crowd recognizes that Company A getting that premium boost comes at the expense of every other user.

Company B has two options here:

a) They could either pay Verizon $2X so that their content loads faster,
b) or it can be content with the fact that their rival just paid for better access to the same customer base. Internet

This deal sounds like bureaucratic walking-it-back talk to me. There is no difference between “hardcore Net Neutrality” and the “telecom view”. There is Net Neutrality or there isn’t. Having worked in telecom sector since 1995, the “telecom view” means “how can we make money on this?”

It’s fine to discriminate between audio and video? Really? 10MB is 10MB. It should be nobody’s business whether that 10MB is music, a video clip, an image, or a text file.

I believe there are other reasons Google changing course. It may see the FCC’s lost court case with Comcast this April as a sign that the dismantling of the old way of doing things is inevitable.

Google is becoming very bad and Verizon very ugly here..

THE UGLY

All this sounds like Verizon is cutting a good deal for themselves where their customers (including me) will wind up paying more if they use Google’s content- this is due to people using and watching more YouTube videos so this deal only makes sense that Verizon with it’s FIOS network (they should be pushing this product everywhere) would cut this deal. You may see all the cable and phone companies go this route soon.

The future of Net Neutrality and its alternatives has not yet been decided, but if this end up going to be a broadly encompassing deal, it could influence public policy.

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About Elias Shams
I have been a serial entrepreneur in telecom and social media space for past 12 years or so. I hold a M.S. degree in Telecommunication Engineering from the George Washington University and a B.S. degree in Electrical Engineering from the University of Maryland. I’ve lived and worked in many countries and cities including London England, Tehran Iran, Bonn Germany, Paris France, Alicante Spain, Delhi India, and my favorite of all Washington, DC of great US of A. Two of the greatest Washington, DC based companies I worked for and very proud of are Yurie Systems which was sold to Lucent in 1998 for $1.23 B and telezoo.com that I founded in 1999. I am currently the founder and awesomizer @ awesomize.me

9 Responses to The National Broadband Plan: The Good The Bad and The Ugly – Part II

  1. EntrepreNerd says:

    As much as I dislike what Google & Verizon submitted, and would love to agree with you here, the fact of the matter is you are wrong. Not just wrong mind you, but factually incorrect in every way.

    Everything you just said is exactly what net neutrality prevents and will continue to prevent even under the Google/Verizon suggestions. What it would allow for is service providers to manufacture a second tier internet backbone and then sell access to this tier, while at the same time absolutely preventing all the discrimination examples you just provided in your write up. Both company A and B would function unimpeded, and identically, on the “public internet” with the option to purchase access to a higher tier service network.

    What you have here is a Freemium business model for service providers. The “public internet” is the “Free” in FREEmium, and the higher tiered, and completely separate, network would be the “Premium” part.

  2. Henry says:

    How can FTC stop google, if its supported by the CIA itself

  3. John Mann says:

    Name one place in the entire country where somebody has a choice of cable providers to the same location.

    It’s much more common than you think.

    Boston, for example, has Comcast and RCN over much of the area. In fact, just about any market with RCN, which is most of the larger east coast markets, has cable alternatives. What often screws people is not the provider, but rather apartment/building management only picking one cable company for the entire building.

  4. Steve says:

    $5 a month for a SLA’d all apps Google account would be worth it.

  5. Hamid says:

    Google is trying to introduce a “premium” subscription search service with this proposal to monetize search even better.

    Imagine charging people $5 a month to use Google search…

    Their getting desperate trying to find new revenue streams.

  6. Derek says:

    “Let’s not start down the wrong path now.”

    Which is exactly why we shouldn’t all of a sudden listen to Google/Verizon and favor their business interests. If the NN issue is forced, I’d sure as hell rather have the FCC in control as opposed to corporations.

  7. Homi J says:

    In what way is the Google+Verizon proposal a step backwards? Currently, today, there is no regulation at all and Verizon can do what they want. Verizon has in effect, agreed to Net Neutrality for wireline transferred data.

    What Verizon wanted was an exemption for wireless, and I agree with them, they should have it, because today, voice calls are handed via specialized protocols, historically, circuit switched and isochronous logic, but now moving slowly to packet switched.

    You guys bitch and moan so much about network phone quality and dropped calls, and if you want Verizon to keep building out their wireless bandwidth, and do cool stuff like VoIP and Video-Chat calls that don’t suck, they need the ability to specially route this data. Ditto if you want services like “OnLive” to work well. I just don’t see the problem.

    Sure, Verizon would like to prioritize their VoIP chat over Skype, and why not? Skype would be getting a free ride on their network overwise. Unless you want to government to build the wireless networks like the highways, you can ask Verizon to spend huge sums of money to offer say, Video Chat, with small profit margins, while some other company spends almost nothing on infrastructure, and gets huge margins, because all they had to do is build the software.

    The only way that kind of neutrality will work is if the government rules that phone companies can only be basic “bit pipes” and that any value added service much be bought by a party not owned by the ISP.

  8. Homi J says:

    Indeed! Google is not doing project for CIA and the whole US Government. Who is going after them?

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