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The Google Welfare Act of 2008

Chairman Markey's newly introduced net neutrality bill should more aptly be called "The Google Welfare Act of 2008." 

  • Google was quick to applaud introduction of the Markey bill on its blog and in a fawning call with reporters. 
  • Google's standard line was that "this bill is not about Google but about the next Google."
    • When anyone says something is not about "me" but about the next incarnation of "me" you can be pretty sure it really is about the "me."

Let us cut through all the platitudes, spin, fluff and distractions in this bill of which there are many. Let us also remember the useful phrase: "the truth, the whole truth and nothing but the truth."

  • Proponents of the Markey bill are indeed telling the truth that the bill does not formally or explicitly mandate FCC net neutrality regulations.
  • Unfortunately they are not telling "the whole truth and nothing but the truth," because the real world impact of the crux of this bill would be to trigger a cascade of new regulations of the Internet in order to comply with the U.S. policy change in this bill.

Why would the Markey bill trigger a cascade of new Internet regulations?

  • The crux of this bill as described by its supporters is:
    • "Section 12. Broadband Policy. "It is the policy of the United States -- (1) to maintain the freedom to use for lawful purposes broadband telecommunication networks, including the Internet, without unreasonable interference from or discrimination by network operators..." 
    • On the call with reporters Ben Scott of FreePress accurately zeroed in on this sentence saying that it effectively modernized communications law by moving the common carrier non discrimination requirements of Title II (sections 201 and 202) into Title I so they would apply to all broadband technologies.
  • "The whole truth and nothing but the truth" that the Markey Bill proponents aren't telling everyone is that this bill would effectively CHANGE THE PURPOSE of the 1996 Telecom Act from promoting competition and reducing regulation to promoting regulations to prohibit "unreasonable interference from or discrimination by network operators."
    • For those who are not familiar with the law, this is a big deal because Title I is the superceding title in the act outlining the FCC's purpose and authority.
    • Changes in the FCC's purpose would naturally ripple through everything the FCC does over time.
  • If this bill passed and changed the purpose of the FCC from promoting competition and reducing regulation to promoting net neutrality regulations for all broadband technologies, it would take the FCC years and a staggering number of rulemaking proceedings to rewrite existing regulations for all the different broadband technologies (telecom, cable, wireless, broadcast, satellite, and broadband over powerlines), to comport with new "common carrier" requirements -- not the current de-regulated information services classificiation of broadband.
    • By focusing on core purposes, this Markey bill would reverse the current policy paradigm of promoting competition and de-regulation to a new policy paradigm of promoting re-regulation

Why should the Markey bill be more aptly called the Google Welfare Act of 2008?

  • The real money behind the fledgling Net Neutrality movement comes from Google.
    • Without its funding, backing and world-leading brand, net neutrality would be a rag-tag band of information commons activists with limited influence.
  • How does net neutrality benefit Google?
    • Google is by far the largest consumer of bandwidth in the world.
      • Internet video drives bandwidth consumption -- and YouTube has seven times the market share of any other competitor -- and Google represents a third of the Internet video market according to Comscore; and
      • Google "crawls" the Internet copying every page of every website daily as the world's dominant search engine, share again per Comscore.
    • Under net neutrality, average Internet users heavily subsidize the bandwidth cost of the biggest producers of Internet traffic -- like Google -- to the tune of billions of dollars.
    • Net Neutrality is a massive corporate welfare scheme where Google is pushing a radical change in public policy that would save Google billions of dollars in bandwidth costs in the future.

Bottomline: Don't be fooled by the I"nternet freedom" rhetoric. This is about money. Google wants the average American Internet user to massively subsidize their market leading free-cash-flow machine.