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Net Neutrality and Google/Verizon

What surprises me about the Google/Verizon deal is not that they have come to agreement, but that they have taken so long to do so. What they have agreed to is essentially what I proposed they do back in 2006.

What Google want and what Comcast, Verizon and the carriers want is not and was not incompatible. They both want high speed access, the dispute is over who pays for that high speed access. Google would prefer someone else pay. Verizon/Comcast want to build out high speed networks but are skeptical as to the willingness of consumers to pay for faster access.

If not for the way that Google and Comcast had raised the issue, I would have written much more about the issue in public at the time. But one of the biggest problems with net neutrality was the ideological manner in which the issue was being fought. Both sides were taking a no prisoners approach and threatening reprisals against anyone who might dare suggest a compromise.

On the face of it, the proposal is an entirely reasonable solution to the question of how to pay for higher speed Internet. But it does nothing to solve the underlying structural issue that most US consumers have little or no choice in Internet providers and there are no effective measures of how good the service a provider is supplying.

I currently have Comcast as a provider for my Internet and VoIP. I also have Vonage on my office line, but that is now unusable. But I have absolutely no way to know whether that is because of the Vonage network or because of Comcast. Comcast would like to upsell me to their new Xfinity product, which I might consider if it would let me run my own VoIP server, if I could run a home server, if it would provide me with other services I want, if it would make my home Internet faster. Verizon would like me to consider their FIOS service.

I spend a considerable amount on communications. I am clearly in the target market for these premium services. But at the moment I see no real reason to switch because neither supplier is able to quantify the improvement in quality they are offering.

And this is why I am somewhat more skeptical of the benefit of adding yet more competition for broadband provision into the mix. While competition is unlikely to hurt (unless you are a shareholder of a monopoly provider), it is hard for me to see what benefit I get by switching either. And if I can’t work out what the advantage is, I doubt that the typical subscriber will either. Without objective measures of quality of service, I can’t make an informed purchasing decision.

What we need here is a Nielsen ratings service for broadband provision. A statistically representative group of subscribers would fit measurement devices that sit behind the Internet router and these would feed statistics to one of more bodies that analyze the data and produce reports on the quality of service delivered by specific providers in specific locales. There could even be a service contract element here. If a consumer pays for five star service and only gets one, they get a break on their charges.

The other part of the puzzle is that we need a mechanism that ensures that the Google-Verizon deal is available to all Internet content providers on an equal basis.

Given Verizon’s earlier experience of seeing a firestorm from customers after blocking a text message from a pro-abortion rights group, I seriously doubt that US broadband providers will want to get into the business of political censorship. On the contrary, it is in their interest to assure everyone that they are not taking sides. Whatever short-term gain is realized by favoring one side is going to be far outweighed by the revenge extracted by the other when they get their chance.

No, the real problem is how to make sure that the Internet does not tip so heavily towards the incumbents so that there is no room for innovators to enter in the US market. That would not only be bad for consumers, it would be catastrophic for companies like Google who need external innovators to supplement their internally generated ideas. Google realized the value of video and tried to set up their own service (Google Video, it still exists). But they ended up paying over a billion for You Tube because they had done it better, and Google needed to stay ahead.

In conclusion, I think the deal is positive. But it is the first step, not an end in itself.

By Phillip Hallam-Baker, Consultant, Author, Speaker

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