Email | Print    Type Size  -  +

Google wants something for nothing

Tech Daily - The Internet giant responds to charges that it reversed course on a key Internet concern: Should providers be able to buy a 'fast track' to the Web?

By Adam Lashinsky, editor at large
Last Updated: December 23, 2008: 6:49 PM ET

SAN FRANCISCO (Fortune) -- The Wall Street Journal unleashed a firestorm last week with a page-one article titled, "Google wants its own fast track on the Web." The Journal knew this headline and the words that ran below it would be incendiary.

Google (GOOG, Fortune 500), you see, supports a badly and wonkily named policy called "network neutrality." It basically argues that everyone - and every company - should have equal access to the Internet. This is a peace-love-and-understanding concept, like advocating access to shelter, food and electricity.

In even simpler terms, Google - and most of Obama-supporting, technology-loving Silicon Valley - thinks that big, bad telephone companies, who paid to build the Internet, should charge every taker the same amount for Internet access, no matter how greedily they consume it.

Broadband, in Google's eyes, is akin to water: It's there for the taking. And if you think otherwise, well, you must be incredibly thick - and/or a phone company executive or lobbyist.

The Journal's suggestion, then, that Google was reversing itself and now supporting a "fast track," which is code language for giving some content providers preferential treatment on the Internet in return for higher payments, was certain to rile up the company that does no evil.

Oh, it was riled.

By 14 minutes after midnight on the day the Journal's story ran, Richard Whitt, Google's "Washington Media and Telecom Counsel," (translation: chief nabob of net neutrality) wrote on Google's Public Policy Blog on why the Journal was "confused."

The article, wrote Whitt, "is based on a misunderstanding of the way in which the open Internet works." (It is standard operating procedure in Washington, of course, to insinuate stupidity as a way of attacking one's critics. When the insinuator insinuates, however, it's usually a sign the bomb thrower has hit its target.)

Should information be free?

As with all wonky subjects, this one is tough to summarize. But here goes.

The Journal article disclosed for the first time that Google has approached Internet service providers about paying for a "fast lane" for its content - a proposal that, if true, strikes at the heart of the net neutrality debate. Internet service providers like AT&T (T, Fortune 500) and Verizon (VZ, Fortune 500) believe they should be able to charge bandwidth hogs like Google tiered pricing: faster access for more money, simple rates for slower access, and so on.

Google denies it's seeking preferential access. Instead, it wants to pay Internet service providers to put its computers in the same room as their computers - an industry practice known as "co-location." Doing so helps the Internet run faster - to the benefit of Google and its users.

Google insists that, by talking to ISPs about a co-location arrangement, it isn't changing course on net neutrality. No one, it says, should have to pay more for Internet access, which the company somehow distinguishes from computer location access.

What's at issue is whether Google's relationship with the phone companies was secret, whether it represents a backing off of Google's net-neutrality philosophy, and where President-elect Barack Obama actually stands on an amorphous issue to which he paid considerable lip service during the campaign.

Google has its critics. Scott Cleland, an independent research analyst and noted anti-net neutrality advocate, suggests Google got burned by its attempt to gain a competitive advantage. ISPs, after all, don't have enough physical space to accommodate every Internet company that wants to co-locate.

"Google probably would have gotten greater benefit of the doubt in the WSJ article," wrote Cleland on his blog, "had it been open and transparent in its attempt to benefit specially from smart network innovation and a free market Internet, and if the secret effort would have benefited Google's dwindling competitors as well."

The bottom line here isn't the fine points of public policy. The main thing is attitude. The Web culture thinks things should be free. Internet access is a commodity. Music videos are for the taking. (See the breakdown in talks between Warner Music (WMG) and YouTube, which is owned by Google.)

The Internet has also trained a new generation of consumers to believe information is free. Consider a particularly thoughtful article on the subject of newspapers by The New Yorker's James Surowiecki. "For a while now, readers have had the best of both worlds: all the benefits of the old, high-profit regime -intensive reporting, experienced editors, and so on - and the low costs of the new one," he wrote. "But that situation can't last. Soon enough, we're going to start getting what we pay for, and we may find out just how little that is."

It's a sentiment Google seems already to have considered - even if it won't say so. To top of page

Company Price Change % Change
Facebook Inc 60.87 -0.49 -0.80%
Bank of America Corp... 16.34 -0.03 -0.18%
Microsoft Corp 39.86 0.17 0.43%
Verizon Communicatio... 46.28 -1.15 -2.42%
Micron Technology In... 26.16 -0.09 -0.34%
Data as of 4:01pm ET
Index Last Change % Change
Dow 16,501.65 0.00 0.00%
Nasdaq 4,148.34 21.37 0.52%
S&P 500 1,878.61 3.22 0.17%
Treasuries 2.69 0.00 0.07%
Data as of 9:14pm ET
More Galleries
Don't give my job to Staples Hundreds of U.S. Postal Service workers protested against experimental mini post offices at Staples. Here's why some Washington, D.C. workers don't like the deal. More
Tools to make your money grow You've started saving and built a financial base. Time for a few new strategies and tools to get your money to grow even more. From real estate to IRAs, here are some tips. More
Ready to start saving? Here's how to do it right When you are just starting out or finally starting to get serious about saving, the basics will get you far. Here are more than a dozen tips that will help you lay the base for building your net worth. More
Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.