Dear WSJ: Will You Pay Google's Bandwidth Bill?

from the please,-let-us-know dept

And here we go again... The whole "network neutrality" discussion really burst onto the scene in 2005, when (then) SBC CEO Ed Whitacre made claims that Google was somehow "free riding" on SBC's (now AT&T's) network. Of course, that made no sense. Everyone pays for their own bandwidth. The only way that would make sense is if the bandwidth you paid for only brought you to the internet backbone, but never to an end point. Yet, that seemed to be exactly what Whitacre was claiming. You see, the bandwidth you pay for is only supposed to get you onto the internet. To actually reach a site, in this logic, the site owners then should have to pay to let you reach from the internet to their site (never mind that they already pay bandwidth themselves... in this logic, that's only the bandwidth from themselves out to the network, but not from the network for you to reach the site).

This, of course, makes no sense at all. And yet, PR people and telco lobbyists know that it makes for a good soundbite. Mike McCurry, a former Clinton aide who went on to run a telco lobbying group (and now runs an entertainment industry lobbying group) declared in 2006 that Google was getting such a free ride that they "never have to pay a dime no matter how much bandwidth they use." In response, I challenged McCurry and his organization (Hands Off The Internet) to pay Google's bandwidth bill. While the group clearly read (but did not understand) Techdirt, they never responded to the challenge (shocker), and Google had to go on paying its own bill -- though, McCurry assures us that it's not even a dime.

We had thought that such ridiculous reasoning had finally been taken away from the debate, but with the FCC back to pushing for net neutrality, we're seeing the argument pop up again. Holman W. Jenkins Jr., a WSJ editor has an editorial making the same bogus free rider arguments yet again, and accusing Google of wanting "internet socialism." Karl Bode, over at Broadband Reports provides a rather epic response (this is just a snippet -- read the whole thing):

It doesn't matter how many times you point out that companies like Google pay millions of dollars for bandwidth and their own infrastructure, the paid talking heads who work for Verizon and AT&T simply keep repeating the same myth. Telling these individuals that AOL users paid phone companies billions in tolls and long-distance fees will get you nowhere. By demonizing Google and repeating nonsense, Jenkins and AT&T can distract marginally unintelligent lawmakers, journalists and the public from the real issues. Unfortunately, they're right.

Yes, companies like Google are not saints. Yes, Google is solely interested in dominating the advertising industry. Yes, companies like Google can and possibly will turn into anti-competitive tyrants over time who violate user privacy and do everything in their power to obliterate competitors. However, the network neutrality debate was not started by Google. It was started by a very confused Ed Whitacre.

Network neutrality has always been about phone and cable companies trying to maintain power in the face of Internet evolution. If network neutrality confuses you (and it pretty clearly confuses Mr. Jenkins), at least understand one thing: network neutrality has always been about phone and cable companies trying to maintain power in the face of Internet evolution. You can't blame phone company executives for being terrified. They should be.

The evolution of the Internet is strangling decades old cash cows, herded across analog fields by monopoly dinosaurs who've been pampered by Uncle Sam for generations. As voice becomes simply data, charging nine dollars for services like caller ID or call waiting (both of which costs pennies to provide) becomes untenable. Suddenly, programs like Google Voice allow users to send free SMS messages, eroding hugely profitable SMS revenue. AT&T and Verizon, protected from competition for so long, are coming face to face with reality for the first time in generations.

With voice, video and other services all just bits, broadband has made cable and phone company empires as service providers irrelevant, whether they know it yet or not. That leaves them with one purpose: running a network. And while the baby bells make a perfectly healthy fortune simply selling flat-rate bandwidth in this new paradigm, investor pressure and the need for quarter over quarter stock improvement makes simply being incredibly profitable not good enough.

I have to admire one trick, however. Jenkins did flip one of the common stories. Usually the anti-net neutrality stories focus on the massive rise in internet growth and the threat of some non-existent "exaflood." Jenkins admits that's bogus: "Broadband growth is leveling out in the U.S." But... rather than note how telcos have been using the exaflood story to push for the right to break net neutrality, he pretends that this also is a reason to break net neutrality, because it means that broadband providers have to compete to steal customers from each other, and can't risk pissing off customers by blocking sites. Of course, that only works if there's real competition. And, in most markets, people have at most 2 providers. If both of them break net neutrality... then what?

While some will now insist that I support the legislation being proposed, let me make it clear that I do not. I am worried about the long term impact here. But, I do believe that the principles of network neutrality should be preserved, even as I worry about how the government might do it. And I am most certainly not convinced by the ridiculous arguments put forth about such "free riding." So, let's make the same offer to the WSJ that we made to Mike McCurry all those years ago. If you honestly believe that Google is "free riding" thanks to net neutrality, will you agree to pay Google's bandwidth bill? How about you exchange yours for theirs and make it a fair trade? Since they're doing so much free riding... it's cheap, right?

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Entertainment Industry Really Really Really Wants To Believe Pirate Bay Verdict Is A Win

from the this-is-what-we-call-delusional dept

As was easily predicted when The Pirate Bay verdict came out last Friday, the entertainment industry celebrated it as a big win. Amusingly, Arts+Labs, one of many, many entertainment industry lobbying groups (and run by a guy, Mike McCurry, who thinks that Google doesn't pay a dime for its bandwidth), was quick to praise the decision, with McCurry claiming that this is a turning point and that people will now realize that file sharing is "something both dangerous, criminal, and unfair." (I'll let the grammar nazis figure out which two of three things he meant when he said "both").

I love these proclamations of turning points. Especially since there's absolutely nothing to support it. We've seen the entertainment industry shut down Napster, Aimster, Morpheus, Grokster, TorrentSpy, OiNK and others over the years, and none have been "turning points" in the direction the entertainment industry wanted. In every case, things actually went the other way. Every time they shut down one of these services, another one shows up to pick up the slack and turns out to be bigger and more popular than the previous ones. In the meantime, over in Sweden, the ruling had generated large protests and thousands rushing to sign up to be a member of The Pirate Party. If it's a "turning point" for anything, it seems to be the opposite of the what the industry wanted.

I've said it before and I'll say it again: I don't think that most file sharing is legal or right (and I don't participate in any of it). But, millions of people who know that it's illegal have absolutely no problem taking part in it, and no "education" campaign or shutting down of a particular site or service is going to stop that. Continuing to pretend it will doesn't help the industry at all. What helps the industry is to stop denying that this is something that can be stopped legally, and finally moving on to experimenting with business models that work -- such as the business models that we've been describing here for over a decade. It's not that hard, no matter what entertainment industry lawyers (and it's always the lawyers) insist.

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Because There Aren't Enough Anti-Piracy Lobbying Groups...

from the we've-got-another-one! dept

There are already a ton of lobbying/industry groups out there that push "anti-piracy" campaigns. You've got the RIAA, MPAA, BSA and ESA, each covering different industry segments. Then, of course, a year ago, a bunch of entertainment industry companies got together and put together the ridiculous Copyright Alliance, whose main mission in life seems to be to spew utterly false propaganda in favor of stronger copyrights at every turn. But, apparently, that just wasn't enough. So, word came out this week of a new anti-piracy lobbying "supergroup" with the innocuous sounding name "Arts+Labs." The big difference here? Well, the entertainment companies convinced a few tech companies to join up as well: AT&T, Microsoft and Cisco. AT&T, of course, has been drifting towards filtering its network -- and Cisco wants to sell filtering equipment. Microsoft, of course, has always been vocally against "piracy" even while quietly admitting how much piracy benefits the company.

This new group will be headed by Mike McCurry -- who you may remember as the former head of the anti-net neutrality group "Hands Off the Internet" who had a slight problem in that he couldn't stop lying, and simply ignored it when people called him on it. My favorite, of course, was his claim that Google didn't pay a dime for its bandwidth, and net neutrality was all about making others pay for Google's bandwidth usage. I challenged McCurry to swap his home broadband bill with Google's (which, according to McCurry was "not a dime") to which, Hands Off responded with deafening silence -- though, the group had no problem then lying about our positions on things when it suited the group (and, again, not responding when I asked them to correct their false statements about us).

So, expect a string of similar tactics from this group.

To begin with, the group appears to be positioning "piracy" as something similar to "viruses" or "spam," suggesting an equivalency that should lead to widespread use of filtering equipment. Of course, they seem to be missing the fact that piracy isn't about others with nefarious intent trying to harm or scam you -- but about people getting content that they want. But in Mike McCurry's "up is down, down is up" world, piracy is apparently something that consumers themselves need to be protected from:

"We want consumers to have exponentially greater opportunities to access creative content in a variety of formats, and with confidence that they are safe from viruses, hackers, malware, illegal file trafficking and other net pollution that puts them at risk."

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