Google: Tech's discriminator in chief?

When financial types describe Google's growth juggernaut they routinely say that 99% of Google's revenues come from search advertising. Remarkably they have turned search advertising from nothing 8 years ago to a roughly $10 billion a year business. Truly extraordinary. But how did they do it? Through economic discrimination, the highest bidder wins. Basic market forces.

So what's my point? Google's entire business model is based on discriminating against websites -- what they say net neutrality is needed to prevent. 

  • Google implores Congress to not allow broadband companies to discriminate against any website or content based on how much they pay.
    • Google's highly successful economic discrimination business model should be illegal for Google's potential broadband competitiors. 
  • Does the little guy have a chance to outbid the big guys to get their business on Google's  first page of search results or will they be relegated to the "second tier" page where few ever tread?
  • Google's hypocrisy and competition double standard is especially galling, becuase Google has comparable market share in their market as DSL or cable providers have in their market.

FCC rules no Net Neutrality for Broadband over Powerlines

Kudos to the FCC for unanimously ruling that the promising "third pipe" into the home, Broadband over Powerlines (BPL) is an unregulated information service.

  • The import of this decision is that it means no net neutrality for BPL.
  • The FCC now has ruled all major intermodal broadband compeitors, cable modem, DSL, wireless broadband, and BPL to be information services and not subject to net neutrality regulation. Hooray! You go regulators!
  • It is ironic and incongruous however, that the FCC Democratic commissioners who voted no net neutrality for BPL, are reportedly still holding up the AT&T-Bell South deal in part over wanting to add more net neutrality conditions to that merger.

Please also make note of Chairman Martin's clever use of the word "neutrality" in his statement:

  • "I believe that it is the Commission’s responsibility to help ensure technological and competitive neutrality in communications markets."
  • The Chairman is dead right to remind everyone that net "neutrality:"
    • is not technologically neutral -- it would pick edge technologies over network intelligence technologies
    • Nor is it competitively neutral since it effectively would pick tech competitors over communications competitors.

Check out this great new analogy for why net neutrality is so off-base -- "food-neutrality"

Every now an then someone comes up with a new great analogy that really helps us get to the heart of a matter. Canadian Mark Goldberg's telecom trends blog really hit the nail on the head in this post. 

Let's go right to his analogy:

  • Videotron boss Robert Depatie: "also spoke from his past business experience.
Before I worked at Videotron, I was in the food business – we were a 'content producer' in the parlance of today's communications business. To reach our customers, we dealt with a distribution channel, in our case, grocery stores.

To reach our customers we needed to convince our distribution channels to place our product in advantageous positions (end of aisles, eye-to-shoulder height on shelves – too high, or too low and sales suffered), and to help promote our product. We paid for that service. We compensated the distributor for his 'help' in making our product more successful.

  • Not all producers pay stores for product placement. And I have noticed that my neighbourhood grocery stores and drug stores give preferred placement to their house brands. But I don't see people shouting about food neutrality. There is no 'Save the soft drinks' movement. Although with winter approaching I would like to find Red River cereal more prominently displayed, I shop around until I find it. I'm not calling for a federal inquiry as to why Sugar Zombies are easier to find at every store.

There is limited shelf space next to the cash registers or at the end of each aisle. How do you think the decisions get made as to which products get displayed there?" [bold added for emphasis]

Diller's IAC unabashedly showcases their Net Neutrality competition double standard

Newsweek's article "Diller Weaves a Web" is a very clear example of the gross competition double standard that tech companies are pursuing in asking for a "non-discrimination" principle to only apply to competitive broadband companies but not to themselves.

  • (Barry Diller is CEO of IAC which is one of the six online giants funding the "ItsOurNet" coalition along with Google, Yahoo, ebay, Amazon and Microsoft.) 
  • Until now, I hadn't been lumping IAC in with the other online giants becuase their name is hardly a household brand although many of thier holdings are: ask.com, ticketmaster, etc.
  • Now that IAC is shamelessly trumpeting the great value of its "discrimination-based" Internet business model to pump its stock, I can't resist shining a well-deserved spotlight on IAC.

Don't get me wrong, I don't have any trouble with IAC pursuing this business model. Â I am only needling IAC for its bald, self-serving hypocrisy of seeking to get the government to protect them from potentially "discriminatory" competition so they can freely "discriminate" against the little guy website that ItsOurNet claims to be supporting.

Let's look at an interesting quote from the Newsweek article:

Google's self-serving "innovation without permission"

Something that Alan Davidson, head of Google's Washington office, said at our NVTC net neutrality debate yesterday has been troubling me. He said Google believed in "innovation without permission."

While "innovation without permission" may be a useful mantra in encouraging Google folks from not getting bureaucratic and to "think outside the box" -- it's very troubling because it seems it is their public policy too.

I guess it means Google doesn't need any property owners' permission to innovate.

  • That must be why the publishers are suing them over digitizing their books without permission.
  • That must be why the newspapers are suing them for using their headlines and photos without permission.
  • That must be why trademark owners are suing them for using their trademarks for commercial purposes without permission. 

What a buzz kill to have to ASK for permission to innovate. Doesn't everyone understand that Google is just "liberating" that property for the common good and just earning a little commission along the way for their altruism? What's the harm in that? They are not "doing evil" are they?

Net neutrality is an online fundraising ploy masequerading as public policy

I launched the debate this morning at the NVTC forum on Net Neutrality with the following comment: "Net neutrality is an online fundraising ploy masequerading as public policy." It certainly focused the debate on the real reason why this issue has become so big so quickly. I pointed out that on substance it was a bogus issue. No substantiated problem or consumer harm and that all the substantive assertions made by net neutrality proponents have proven false. When the substance was so weak and the threat only theoretical, there had to be more going on.

I focused on the dirty little secret that partially-motivated many net neutrality proponents --which is how super-productive it is for groups that want to raise money online to scare people that there are boogymen that want to take the Internet away from them. Net neutrality has clearly become one of the most efficient ways to "shake the money tree."  

Alfred Kahn "A liberal Democrat's Caution on Net Neutrality"

Attached is a link to Alfred Kahn's (of Airline deregulation fame) views on Net neutrality. Thanks to PFF for posting this gem.

It's a very relevant read because Mr. Kahn considers himself: "a good liberal Democrat." He is also one of the most respected figures on the subject of regulation and de-regulation regardless of party or political persuasion.

Here are a couple of good quotes:

  • "competition is a far better protector of the interest of both consumers and content providers (think radio, television, motion pictures and the Internet) than government ownership or regulation"
  • "Why all the hysteria?" over net neutrality.

If Noam's right that the future of Internet is telecom-like regulation -- everyone should be very afraid

Read Eli Noam's recent FT editorial "TV regulation will become telecom regulation", becuase if he is right (and I don't think he is) you should be afraid for the future, very afraid.

I have always respected Professor Noam of the Columbia Business School even if I often don't agree with him. He is a rare person who sees this complex space as a whole and has clarity of thought. 

His basic point is that TV regulation will become to resemble telecom regulation more are and more. He concludes that "the present debate over net neutrality is a harbinger of more to come."  Â 

Net neutrality's "moving goalpost" on competition

I wanted to make sure folks did not miss a classic comment by a leading net neutrality proponent last week which shows their stubburn refusal to acknowledge the reality and "proof" of competition.

In Communications Daily last week in the lead article on the AT&T-Bell South merger was the following quote:

  • "Public Knowledge Pres. Gigi Sohn, another coalition member, said  AT&T should abide by conditions longer than proposed. Conditions should last until competition can be proven, which probably would be for "a very long time,' she said." [bold added for emphasis]

Until competition can be proven? Hello? Gigi you are obviously ignoring all the existing proof and playing the Washington game of "moving the goalposts." 

Search Peeping: Does Google value protecting American's privacy?

Robert Scoble of Naked Coversations fame (great book Robert! Thank you.) posted a very interesting 7 minute video of Google's Lobby on his widely read Scobleizer Blog:

  • "Here’s a silent video (I was shooting some “B Rollâ€? at Google the other day and thought it would make a fascinating video for you to watch). What is it? It’s the lobby of building 41 over at Google’s headquarters. It’s a little more than seven minutes long. What does it show? The cool screens where you can sit and watch random searches that are being done on Google right then."

After initial fascination like Scoble with reading real random searches as they were occurring, upon reflection I found it very troubling. Why its interesting is exactly why its troubling. It's interesting because none of us in the public domain ever get to see what anyone else is searching for at a specific point in time, because that is potentially very personal/private search information -- which I thought until now -- was supposed to be guarded as private information by Google. 

What's troubling is that if Google handles American's private information so cavalierly as to use it for perfomance art in public, what other private information are treating cavalierly that we don't know about? 

Is anyone else troubled that Google doesn't see anything wrong with "search peeping" or a public "search peep show?" What do privacy advocates think?

 

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Q&A One Pager Debunking Net Neutrality Myths