Google

My core problems with Professor Tim Wu's white paper for the FTC on wireless net neutrality are with his disguised core assumptions.

First, it is clear from  Mr. Wu's top two recommendations that Mr. Wu rejects U.S. competition policy and wireless competition policy as abject failures.

• He recommends caterfone for wireless!
• The simple translation of his oxymoronic recommendation is: foster a competitive market by regulating it like a monopoly. 
• He then doubles down on his Government-knows-best view and recommends monopoly non-discrimination regulations for competitive wireless carriers.
• What he is really saying is abandon competition policy and let he and his brethren decide what's best for everyone.

Mr. Wu should come clean and just say in a straightforward language what his White Paper strongly implies.

• Its obvious that Mr. Wu does not think that competition works in communications or in wireless.
• He does not think competition best serves consumers, and has the datatopian view  that "benevolent all knowing" regulators need to decide what technologies should succeed, who can innovate and who can't, who can make money and who can't.

Second, Professor Wu analysis suffers from what I call the "perfection fallacy."

The evidence continues to mount from highly respected sources that Google's business model is aligned with and tolerant of promoting illegal activities.

• This blog post catalogues includes many articles highlighting this theme from:
•  the Wall Street Journal, the New York Times, The Washington Post, and Investors Business Daily among others.
• Where there is smoke there is usually fire.  

Today, if you want another high profile reminder that Google's business model is aligned with, and tolerant of, promoting illegal activities, go no further than Page One of TheWall Street Journal: "Media firms say Google benefited from film piracy." 

• Despite Google's infamous double-negative motto: "Don't be evil," apparently Google's salesforce and sales management actively sold ads to two sites that were actively involved in piracy of copyrighted material: EasyDownloadCenter.com and the DownloadPlace.com. 
• According to those familiar with the afadavits, Google went so far as to supply these sites with clearly problematic keywords like: "pirated" and "bootleg movie download."
• Can you say "complicit?"

This is just additional evidence that Google's entire business is aligned with doing whatever it takes to encourage clicks on their ads or their "keywords" because every such click is money to Google.

Just got back from New York where Dan Brenner of NCTA and I faced off against NN proponents Professor Susan Crawford and Skype's Chris Libertelli.

It was a different format less washington-ish and more finance-ish given the audience and Eli Noam's deft moderating hand.

The quip of the day goes to my colleague Dan Brenner who summed up the net neutrality proponents views as "love the carriage, hate the carrier."

• So true, they just want to assume that the network will always be there and not have to pay for it.

I framed my views in an MBA context, explaining what was really going on competitively and commercially in the NN debate.

• I explained that the dominant dynamic in the sector was the collision of the converging tech and com sectors;  (My techcom thesis.) and that net neutrality was simply the politics of that violent collision..
• I also framed it as a huge clash between the very different business models of the software industry  that wants bandwidth to be abundant and free, and the hardware/network sector that have to invest, build and make the Internet work and that have to keep up with the exploding demand of bringing video to the net.
• I reminded them of the exaflood point that a 30 minute sitcom consumes 7,000 times more bandwidth than visiting a website,
• You can't wave a magic wand and have the Internet handle video without lots more investment in capacity -- that someone has to pay for -- and why should it just be the consumer that has to pay that bill.

The best question was how could one bridge the gulf between the polarized sides.

I was delighted to see Mark Goldberg's post alerting us in America that the Canadian Government is opposed to embracing net neutrality regulation as well.

I love Mark's no apologies free market stance. He knows the Internet's growth, vitality, and diversity has come from free citizens, freely interacting and cooperating, free of government intervention. As he said, let freedom reign!

This is more evidence that the rest of the world is not pro-net neutrality despite the balderdash NN proponents toss  around.  

What do the following three stories of the last few days have in common?

• Yesterday, Reuters quoted Google's head of TV Technology, Vincent Dureau, saying: "the Web infrastructure, and even Google's (infastructure) doesn't scale. Its not going to offer the quality of service that consumers expect." in an article that highlighted new Internet TV services of Joost and YouTube.
• Tuesday, USA Today had a front page story that WalMart was launching a service in conjuction with major studios to allow downloading of movies the same day as DVDs are released and the next day for TV shows through WalMart.com.  
• USA Today also reported Tuedsay that TiVo and Amazon were launching a new service for letting online users download movies to their DVRs and then watch them on their TVs rather than their computers.

What's the common thread? Its obvious that the capacity of the Internet will have to increase exponentially and rapidly to handle the coming exponential increase in traffic generated by Internet video.

       "GOOGLE'S HYPOCRITIC OATH"

As a 'Googler", I swear to fulfill to the best of my ability and judgement this covenant:

I will do harm to competitors while claiming to be their victim.

I will use double negatives like "don't be evil" to simulate sincerity and maintain 'plausible deniability.'

I will defend Google's legendary secrecy and lack of transparency by explaining secrecy is what keeps the Internet 'open'.

I will claim Google works for consumers even though all of Google's revenues come from advertisers.

Today's WSJ article: "MySpace pact with Google hits a snag" is a helpful reminder of the competition double standard and hypocrisy of net neutrality proponents Google and eBay.

Google the dominant search gatekeeper with 47% share and rising is the world's leading Internet access technology. They have a pact with Myspace, one of the fastest growing sites on the planet that would pay MySpace's News Corp. $900m for placing Google's search on MySpace.

• While this business practice is perfectly legal and above board, it is precisely the type of business arrangement that Google has outrageously mischaracterized as "discrimination" and is seeking to make illegal for its broadband competitors.

 Meanwhile, the pact is supposedly hung up because MySpace would still like to have a "discrimnation" deal with eBay too, where MySpace users could use post eBay auctions on their MySpace page. But Google only likes "discrimination" that is in its favor.

Listen to a priceless quote from the WSj article today:

• "Google isn't likely to favor any deal that promotes eBay services that compete with their own."
  • Yep that sums it up Google's real belief in "neutrality." 

How does Google explain their attempt to "block, degrade and impair" eBay's ability to easily reach Myspace consumers is not precisely the net neutrality "discrimination" problem that they want to ban?

I really enjoyed the Washington Post article today "Google still searching for recognition in DC."

• The Post article was some humble pie for Google:
• It opened by mentioning noone recognized the supposed celebrity Google CEO at the location of his one public speech;
• Then went on to retell the story of how Google founder Sergey Brin showed up in DC in jeans and tennies and couldn't get meetings on the Hill;
• And finally it concluded with a zinger of how a third of Schmidt's audience left during his talk.
  

I have attached the link to Esther Dyson's important interview on net neutrality.

• Her real life experience and leadership in dealing with ICANN and government regulators is worth paying attention to.
• Esther is very widely respected in the Internet community and always thoughtful in her approach to problems.
• She has even been dubbed the "Internet High Priestess".

Wired has an interesting article on how Microsoft's new Vista operating system has had to make some tough and restrictive design calls that some could misread as "discriminatory".

• The Wired article by Michael Calore, explains how Microsoft restricts or "cripples" users ability to use virtualization technologies to get certain content and how Microsoft's Defender will search for spyware and in some cases automatically delete applications.
• it looks as if Microsoft has legitimate business reasons for this blocking, degrading and impairing of certain content and applications.  

Why this is relevant to net neutrality and Microsoft is that:

• Microsoft has 90% share of the Internet browser market which is a potential Internet access technology bottleneck and gatekeeper that net neutrality proponents conceptually fear;
• Microsoft as explained in this Wired article is clearly exercising its freedom to:
• discriminate against users to force them to buy a higher priced product if they want to do certain things; and
• design its product and service as it sees fit.
• Microsoft clearly wants to preserve its right to differentiate and to control its product/service, something we at NetCompetition understand and support.

 Why this is relevant to Microsoft's departure from ItsOurNet is that Microsoft evidently understands that regulation can be "unreasonable" and "unjust" as I explained in a previous post.