Google, Verizon Want Congress to Get Off Its Duff

The technorati seem to dislike the "joint policy proposal" from Google and Verizon today. Company representatives insist it's about an "open Internet" -- albeit one from which companies can continue to innovate and profit. The "albeit" automatically triggers suspicions that Eric Schmidt, Google's CEO, is simply a Ferengi in disguise, and that anything two companies say about open access to the Net of the future has to mean exactly the opposite of their stated intent. This is a little unfair. Unless government is going to build and maintain the infrastructure for broadband Internet access, wireless or otherwise, corporations have to hedge their bets. It's not "evil." It's predictable.

What Google and Verizon are trying to do is add some definitions to a debate that lacks them, and provide an impetus for the federal government to get off its duff and figure out how to make difficult decisions.

The point of controversy is that, as Google as evolved from a search company into a company that does everything, its concept of net neutrality has evolved as well. Of course, everyone should have the same ability to access the same websites at the same speed and prices regardless of which network provider does the interfacing on the current network infrastructure.

To the extent that the Net has become or is becoming a mechanism for providing services, rather than just content, Google and Verizon want to be able to "differentiate" them. That is, if net neutrality is about content equality, then Google and Verizon do not believe that, say, a company that provides home health care monitoring over the Internet is producing "content." Certain goods, certain functions -- energy, security, health care -- might deserve priority handling. (Actually, net neutrality was never really completely neutral -- who wants spam to get the same treatment as HuffPost Hill?)

The companies distinguish between "wireline" and wireless broadband, with the former being the current mechanism for access to the Net and the latter being the future one. Since most of the people who will be evaluating the proposal are forward-leaning, they're going to wonder why the companies refuse to apply the principles of non-discrimination and equal access to the medium that will almost certainly be dominant in the future.

The policy statement also makes it crystal clear that both companies reserve the right to enter into business agreements that create tiered or priority traffic access on wireless networks in the future on subjects that don't have anything to do with, say, health care or infrastructure. Google and Verizon want viable business models, as the WSJ notes:

Net neutrality was always a contentious issue, and, idealism aside, there were straightforward economic issues at work. For media companies, it was about getting access to telco networks at a rate that was advantageous to them.

The aim for the telecom companies remains to extract as much return from the network as it can get away with, without upsetting regulators and customers. And one of its ways of fighting its corner is not to build infrastructure if it thinks it will be given away cheaply to others.

If the economy of scale predominates, then bigness will be rewarded, companies will be incentivized to merge, and independent, smaller outfits might be left on the margins.