Let’s not lose sight of this: There really is a war going on between the phone companies and Google over the way Internet traffic will be priced. And both sides want their self interest to appear to be morally superior.
The blogosphere has been in a tizzy all day about an article in the Wall Street Journal that suggested that a new initiative by Google meant to speed up the delivery of YouTube videos and other parts of its service represents an abandonment of the principles of “network neutrality.”
Google responded that the Journal’s article was “confused” and that it isn’t asking for any special treatment. It said it simply wants to build a “content delivery network” of its own so it won’t have to buy services from companies like Akamai or Limelight. Those networks put copies of big files, mainly videos and photos, on servers located in or near Internet service providers so they can be delivered more quickly using less long distance network capacity.
Google isn’t being as hypocritical as the Journal story made out. But it shares the some of the blame for the sloppy rhetoric used by advocates of network neutrality. Sometimes the issue is framed as a total bandwidth egalitarianism, when that’s not really what they want.
There is a huge fight here, not over whether there will be first class and coach seats, but how those seats will be priced and who will pay for them. Google and others are saying that, in effect, every seat in the same class of service should have the same price, and that Internet providers can’t add surcharges to companies they don’t like or give discounts to those they do.
The Open Internet Coalition, of which Google is a backer, writes that on the Internet “both the big player and the new entrant can reach individuals, anywhere, on equal footing.” And it writes that if net neutrality is not guaranteed, Internet providers will charge money to Web companies for fast access, leaving everyone else in the “slow lane.”
The reality today is that rich companies already get first class service, and most network neutrality proposals aren’t going to change that. Big sites buy faster Internet connections and get better service from their providers. Moreover, those with money can buy services content delivery networks like Akamai, or in the case of the superrich, they can set up their own networks, as Google is trying to do.
That has been, more or less, the way the Internet has operated until now. A lot of traffic has been exchanged between various networks without payment. And the rest of the market has been very competitive, with pricing based on standard measures—like the number of bits transported or the maximum capacity.
The phone and cable companies don’t like the existing protocols of the Internet. They argue that since they paid to build the networks, they should be allowed to come up with any pricing scheme they choose. In other communications areas, they have found that the best way to profit is by charging a lower price for base service, and then selling high margin add-ons, like text messages in cell phones, or telephone service on cable systems.
The communications companies don’t want Google to waltz in and offer free voice chat, free messaging or a free version of whatever other add on service they come up with and undercutting their plans without cutting an appropriate deal. They find Google’s argument especially galling since it is making so much money on advertising using their networks.
There are lots of arguments on all sides here and lots of interests to be balanced between different sorts of companies as well as consumers. The incoming Obama administration says it wants to work this out.
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